Bank loans are one of the effective financial solutions, flexibly supporting many different credit needs, from consumption to business. Each bank will have a list of bank loan conditions associated with its specific loan products. However, the basic conditions for this type of loan are similar to that of most lending institutions. So about the matter “Conditions for bank loans under Vietnam law” Let’s find out with LSX in th article below.
Legal grounds
- Law on Credit Institutions Amended 2017
- Circular 39/2016/TT-NHNN
- Circular No. 21/2017/TT-NHNN
Can people get loans from the State Bank, Commercial Bank or State Commercial Bank?
The operation of a state bank is characterized by the following factors:
• Is the highest level bank in Vietnam. The State Bank is the only organization that has the right to issue money and manage monetary activities in Vietnam.
• Do not conduct monetary transactions directly with people, but only with the Government, International Financial Institutions as well as other intermediary commercial banks.
• Be owned by the Government and implement the monetary policies issued by the Government.
Meanwhile, commercial banks include the following operating characteristics:
• Being the second-tier bank in the Vietnamese banking system. Commercial banks do not have the right to issue currency by themselves, but only conduct transactions and currency circulation.
• As an intermediary providing financial and monetary services to people. At the same time, commercial banks can also carry out loan transactions with Vietnamese banks.
• Be owned by the state or set up by private organizations. Commercial banks operate freely but need to comply with monetary policies issued by the state bank.
• The ultimate purpose of commercial banks is revenue and profit. This guest with state banks only focuses on issuing and managing currency.
The concept of state-owned commercial bank: This is a type of intermediary between the state-owned bank and the commercial bank.
Specifically, a state-owned commercial bank is a commercial bank with 50% or 100% of charter capital owned by the State. Therefore, the bank is under the control and management of the Government but still provides financial and monetary services to the people.
Types of state-owned commercial banks are divided according to the state’s capital contribution ratio. As follows:
• State-owned bank: A type of commercial bank in which the state owns 100% of the charter capital. State-owned banks include: Agribank, GP Bank, Oceanbank, CB bank.
• Joint-stock commercial bank with capital contribution of more than 50% by the State: A type of bank established with capital contribution from the State as well as organizations and individuals. However, state capital accounts for more than 50% of the bank’s charter capital. These joint-stock commercial banks include BIDV, Vietcombank, and VietinBank.
Conditions for bank loans under Vietnam law
The banking law stipulates that credit institutions consider and decide to lend when a customer fully meets the following conditions: (Article 7, Clause 2, Article 13 of Circular 39/2016/TT-NHNN)
First, the customer is a legal entity with civil legal capacity as prescribed by law. Thus, non-legal entities (For example, business households, households, cooperative groups, other organizations without legal status) are not allowed to borrow capital at credit institutions. use. Customers being individuals aged full 18 years or older with full civil act capacity as prescribed by law or from full 15 years old to under 18 years old without loss or limitation of civil act capacity as prescribed by law;
Second, the need to borrow capital to use it for legal purposes (understood as not illegal);
Third, there is a feasible plan to use capital;
Fourth, have the financial ability to repay the debt;
Fifth, having a transparent and healthy financial situation according to the assessment of credit institutions, in case customers who borrow short-term loans in Vietnam dong are entitled to a preferential interest rate not exceeding the interest rate for The maximum loan amount is decided by the Governor of the State Bank from time to time in order to meet the following capital needs:
• Serving the field of agricultural and rural development according to the Government’s regulations on credit policies for agricultural and rural development;
• Implement the export business plan according to the provisions of the Commercial Law and guiding documents of the Commercial Law;
• Serving the business of small and medium-sized enterprises according to the Government’s regulations on supporting the development of small and medium-sized enterprises;
• Developing supporting industries according to the Government’s regulations on supporting industry development;
• Serving the business of enterprises applying high technology according to the provisions of the Law on High Technology and guiding documents of the Law on High Technology.
Borrowers must fully meet the loan conditions, and at the same time must provide the credit institutions with documents proving their eligibility for loans and other documents guided by the credit institutions, including mortgage loans with savings deposits, because pledging savings deposits to borrow capital is a measure of loan security in accordance with the law.
Thus, when there is a need for a loan, customers no longer have to send credit institutions a “loan application letter” as prescribed many years ago.
Credit institutions shall base themselves on the capital use plan, the financial ability of the customer, the credit limit and the capital source capacity to negotiate with the customer on the loan amount (Article 12 of Circular 39/2016). /TT-NHNN)
Credit institutions must comply with regulations on non-cash disbursement (Circular No. 21/2017/TT-NHNN)
The application of loan security measures or non-application of loan security measures shall be agreed upon by the credit institution and the customer in accordance with the provisions of the law on security measures and relevant laws. Credit institutions decide and take responsibility for loans without applying loan security measures.
Those who are not allowed to get a bank loan
According to the provisions of the Civil Code 2015, subjects participating in civil relations only include legal entities and individuals. Therefore, the State Bank (SBV) has added regulations on borrowers at credit institutions who are only legal entities and individuals in Circular 39/2016/TT-NHNN. According to Article 8 of Circular 39/2016/TT-NHNN are regulations on borrowing capital of credit institutions, specifically:
“Credit institutions are not allowed to lend for capital needs:
1. To carry out business investment activities in industries and trades prohibited by law from business investment.
2. To pay expenses, meet the financial needs of transactions, acts prohibited by law.
3. To buy and use goods and services in industries and trades prohibited by law from investment and business.
4. To buy gold bars.
5. To repay a loan at the lending credit institution, except for the case of a loan to pay interest on a loan arising during the construction process, where the interest expense is included in the estimate. construction of works approved by competent authorities in accordance with law.
6. To repay loans at other credit institutions and repay foreign loans, except for loans for early repayment of loans that fully satisfy the following conditions:
o Is a loan for business activities;
o The loan term does not exceed the remaining loan term of the old loan;
o It is a loan that has not yet been restructured.
Services of LSX
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On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
Cost: Besides, LSX’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.
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Frequently asked questions
Currently, domestic and foreign banks have many types of loans such as:
Unsecured loan
Overdraft loan
Installment loans
Mortgage loan
….
When an individual or organization borrows from a bank but fails to repay and falls into overdue debt. Surely banks will offer sanctions to deter as well as claim the borrowed money.
Penalties for overdue fees are very high with an interest rate of 150% higher than the original interest rate. In addition, there are additional service fees attached.
Listing bad debts, restricting the ability to borrow loans of past due people or relatives in the same household in the future.
Filed and brought to court to sue for the crime of taking advantage of goodwill to appropriate property.
Loan request form each bank will have a different loan application form and will be distributed to customers by the teller when applying for a loan at the bank.
You need to fill in all your personal and other information and sign the application. After that, the bank/financial company will receive the application as well as verify the information that the customer has declared.
ID card + household registration book/KT3
This is an extremely important document for the bank to confirm the identity of the customer. In some cases, it can be replaced with some kind of document such as: ID card or military ID card (if the customer serves in the military).
Proof of income
Salary certificate/salary statement/labor contract or insurance contract or electricity bill or vehicle registration certificate or unsecured loan contract of another credit institution.
Invoice for payment of business expenses (additional 30 days after the bank disburses).
Business license.
Conclusion: So the above is Conditions for bank loans under Vietnam law. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
