PROCEDURES FOR CALCULATING THE MAXIMUM PERMISSIBLE CREDIT EXTENSION BEYOND THE LIMIT AS OF JULY 1, 2

In accordance with Article 3 of Decision No. 94/QD-TTG, which sets forth the criteria, documentation, and process for seeking approval of a maximum credit extension exceeding the prescribed limit for credit institutions and foreign bank branches, both the borrower and the credit institution must satisfy specific conditions for the consideration and approval of an over-limit credit facility, namely:

*Firstly, the borrower, the project, and the proposed plan for an over-limit credit facility shall meet the following requirements:

- Firstly, the borrower shall satisfy all statutory credit granting requirements, have a clean credit history at credit institutions for the three years prior to the over-limit credit request, and maintain a debt-to-equity ratio, as reflected in the borrower's latest annual financial statements, of not more than three times;

- Secondly, the borrower must demonstrate a capital need to undertake production and business ventures aligned with the country's socioeconomic objectives, specifically those falling within the following categories:

+ The undertaking of significant and time-sensitive socio-economic projects and initiatives to achieve the nation's socioeconomic development objectives, meeting the essential needs of the population, particularly in the sectors of electricity, coal, petroleum, gasoline, transportation, public transport, and other areas as specified by the Government and the Prime Minister at any given time;

+ Implement programs and projects with investment policies determined by the National Assembly or the Prime Minister.

+ Investments shall be made in prioritized sectors as encouraged by National Assembly and Government resolutions on socio-economic development in each period.

- Thirdly, projects and proposals requesting credit beyond the limit must have been assessed and evaluated by credit institutions as feasible, with the customer having the ability to repay, and a credit decision has been made; they must comply with current investment and construction regulations, align with planning and business plans, and have been approved by the competent authority or issued an Investment Registration Certificate.

*Secondly, the credit institution shall meet the following condition:

- Firstly, as to syndicated credit facilities:

+ Having fulfilled all legal requirements for syndicated lending in respect of projects and proposals for over-limit credit facilities where the combined lending capacity of credit institutions is inadequate to satisfy a customer's borrowing demand; or

+ Having issued invitations to at least five other credit institutions to participate in a syndicated lending arrangement and having published such invitations on the official electronic portal of the credit institution and on the electronic portal of the State Bank of Vietnam or the Banking Magazine or the Banking Times for a minimum period of 45 days, but no other credit institution has expressed interest in participating.

- Secondly, at the time of requesting an over-limit credit extension, the credit institution shall meet the requirements regarding limits and safety ratios in its operations as prescribed by the Law on Credit Institutions and the guiding documents of the State Bank of Vietnam;

- Thirdly, the credit institution must fully adhere to all responsibilities and obligations outlined in the over-limit credit facility application and any prior approval documents;

- Fourthly, the credit institution must ensure strict adherence to the credit limit provisions set forth in Clause 8, Article 136 of the Law on Credit Institutions 2024, taking into account the proposed over-limit credit extension.

2. Determining the maximum permissible over-limit credit

As stipulated in Article 5 of Decision No. 94/QĐ-TTg, the maximum permissible over-limit credit for an individual customer or for a customer and its related parties shall be calculated based on the following formula:

MCTDTĐ = TMDN + ĐN

Wherein:

- MCTDTĐ is Maximum Over-Limit Credit Extension

- TMDN is Total Outstanding Credit at Reporting Date

- ĐN is Approved New Credit

In the above formula, TMDN and ĐN are determined as follow:  

-  The Total Outstanding Credit at Reporting Date (TMDN) included in the Maximum Over-Limit Credit Extension is defined as the aggregate outstanding credit of a customer, or a customer and its related parties, with the credit institution at the reporting date, comprising:

+ Total outstanding credit extended within the institution's authorized lending limit;

+ Total outstanding loan balance of credit facilities that have been granted permission by the Prime Minister to exceed the credit limit, which is still in effect as of the reporting date.

-  The newly approved credit request (ĐN): The amount of the new request to be included in the maximum credit limit is the sum of all credit amounts.

3. Procedures for considering the granting of credit exceeding the limit

Pursuant to Article 6 of Decision No. 09/2024/QD-TTg, which governs the procedures for reviewing credit requests exceeding the limit, effective from July 1, 2024, the following procedures shall apply:

Step 1: The credit institution shall submit 01 dossier to the State Bank of Vietnam as stipulated in Clause 1, Article 4 of Decision 09/2024/QĐ-TTg, either directly at the One-Stop Division or via postal service.

Step 2: Within 15 days from the date of receipt of a complete dossier from the credit institution:

In case the credit institution's dossier does not meet the conditions stipulated in Article 3 of Decision No. 09/2024/QD-TTg, the State Bank of Vietnam shall issue a written notification to the credit institution specifying the conditions that have not been met;

In case the credit institution's dossier is valid, the State Bank of Vietnam shall issue a written request for opinions from relevant ministries, sectors, and localities regarding the economic, technical, and legal aspects of the project, plan, and customer requesting the over-limit credit.

Step 3: Within 15 days of receiving the request for comments from the State Bank of Vietnam, the relevant ministries, sectors, and localities shall submit their written opinions on the matters under their jurisdiction to the State Bank of Vietnam. Based on the comments received, the State Bank of Vietnam may request the credit institution or the customer to provide further clarification on any relevant issues.

Step 4: Within 40 days of receiving the comments from the ministries, sectors, and localities, or the clarification from the credit institution or the customer, the State Bank of Vietnam shall verify the completeness and accuracy of the credit application submitted by the credit institution:

If the application fails to meet the criteria set forth in Article 3 of Decision No. 09/2024/QD-TTg, the State Bank of Vietnam shall notify the credit institution in writing of the specific deficiencies;

If the application of the credit institution is complete and accurate, the State Bank of Vietnam shall submit the credit request to the Prime Minister for consideration and decision.

Step 5: Based on the credit request of the credit institution, the opinions of the State Bank of Vietnam and the relevant ministries, sectors, and localities, the Prime Minister shall decide on whether to approve the credit request.