State Bank of Vietnam’s further clarifications on lending regulations

On 8 November 2023, the State Bank of Vietnam (SBV) issued Official Letter 8631 to publish answers to certain questions on lending regulations under Circular 6/2023 of the SBV dated 28 June 2023 (Circular 6/2023) amending Circular 39/2016 of the SBV dated 30 December 2016 on lending activities of credit institutions (CIs) and/or foreign bank branches with customers (Circular 39/2016).

The table below will highlight some notable answers of the SBV.

NEW LAW ON CONSUMER PROTECTION

On 20 June 2023, the National Assembly issued a new Law on Consumer Protection, which will replace the Law on Consumer Protection 2010 from 1 July 2024. In this post, we will discuss some key points of the Law on Consumer Protection 2023.

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NEW RESTRICTIONS ON ONE-WAY MONEY TRANSFER ABROAD

On 30 December 2022, the State Bank of Vietnam (SBV) issued Circular 20 guiding activities of one-way money transfer from Vietnam to abroad and payment, money transfer for other current transactions of institutional residents and individual residents (Circular 20/2022), which took effect from 15 February 2023. In this post, we summarise certain key points of Circular 20/2022.

CONCEPT OF COUNTER-GUARANTEE UNDER VIETNAMESE LAWS

1. There may be a risk that the counter guarantee as defined in Circular 7/2015 dated 25 June 2015 (as amended) may not be considered as a guarantee under the Civil Code 2015 which may results in uncertainty as to the validity and enforceability of the counter guarantee under the Civil Code 2015. Specifically,

1.1. under Article 335.1 of the Civil Code 2015, guarantee is defined as an undertaking made by a third person (hereinafter referred to as the guarantor) to an obligee (hereinafter referred to as the beneficiary) to perform an obligation on behalf of an obligor (hereinafter referred to as the principal) if the obligation falls due and the principal fails to perform or performs incorrectly the obligation. This suggests that a guarantee must satisfy the following conditions:

Vietnam Business Law