Only disburse cash for loans under 100 million VND

The State Bank of Vietnam is drafting a Circular regulating the use of payment methods to disburse loans by credit institutions and foreign bank branches to customers.

The State Bank of Vietnam (SBV) is drafting a Circular to replace Circular No. 09/2012/TT - NHNN regulating the use of payment methods to disburse loans by credit institutions and foreign bank branches to customers, focusing on specific regulations on the application of non-cash payment methods to disburse loans and make payments to beneficiaries and cases where loan disbursement to customers in cash is permitted.

According to the provisions of Clause 1, Article 3 of the current Circular No. 09/2012/TT-NHNN, credit institutions (CIs) and foreign bank branches (hereinafter referred to as banks) must use non-cash payment methods to disburse loan capital and make direct payments to beneficiaries.

Through practical implementation, some banks have requested the State Bank to specify the “direct payment to the beneficiary”. Accordingly, the content of the draft Circular does not use the phrase “direct payment to the beneficiary” but specifically stipulates the application of non-cash payment methods to disburse loan capital and make payments to the beneficiary.

Regarding the regulations on cash disbursement limits, in order to comply with the Government's policy on promoting non-cash payments and at the request of a number of banks to remove or reduce the amount specified in Point a, b, Clause 2, Article 3 of Circular No. 09/2012/TT-NHNN or assign credit institutions to specifically regulate the cash disbursement limit in accordance with the business reality of the beneficiary, the draft Circular stipulates in a narrow direction, specifically credit institutions are only allowed to disburse cash to pay beneficiaries who are individuals without payment accounts at payment service providers or to pay beneficiaries who are individuals with payment accounts at payment service providers with loan amounts under VND 100 million.

At the same time, the draft Circular also adds regulations that credit institutions are allowed to disburse in cash for cases of cash payment by organizations using state capital according to the provisions of law to comply with the provisions of Circular No. 33/2014/TT-NHNN dated November 20, 2014, stipulating a number of cases of cash payment by organizations using state capital.

Accordingly, the draft is amended and supplemented to the point that banks "are considered to decide to disburse loans to customers in cash in the following cases:

a) Payment to the beneficiary who is an individual with a payment account at a payment service provider with a loan amount of less than VND 100,000,000 (one hundred million dong);

b) Payment to an individual beneficiary who does not have a payment account at a payment service provider;

c) Payment to the beneficiary being an organization using state capital shall be made in cash according to the provisions of law".

In addition, the bank disburses loans through the customer's payment account so that the customer can pay for purposes that the law requires to be carried out through the borrower's payment account.

According to Vietnam Law Newspaper