Bank credit for coffee producers in Dak Lak province

1. Lending is a form of credit, in which a credit institution gives a customer a sum of money to use for a certain purpose and period of time according to the agreement with the principle of repayment of both principal and interest.

2. Loan term is the period of time calculated from when the customer begins receiving the loan until the time of full repayment of the principal and interest of the loan as agreed in the credit contract between the credit institution and the customer.

3. Repayment period is the period of time within the loan term agreed between the credit institution and the customer at the end of which the customer must repay part or all of the loan to the credit institution.

4. Adjusting the debt repayment period is when the credit institution and the customer agree to change the debt repayment periods previously agreed upon in the credit contract.

Maybe you are interested!

5. Loan extension is when a credit institution agrees to extend a period beyond the loan term agreed upon in the credit contract.

6. An investment project, production, business, service plan or investment project, life service plan is a set of proposals on capital needs, methods of capital use, and corresponding results obtained within a specified period of time for specific activities for production, business, services, development investment or life service.

7. Credit limit is the maximum loan balance maintained for a certain period of time as agreed by the credit institution and the customer in the credit contract.

8. The financial capacity of the borrower is the capital and asset capacity of the borrower to ensure regular operations and fulfill payment obligations.

Article 4. Implementation of regulations on foreign exchange management

When lending in foreign currency, credit institutions and customers must comply with Government regulations and instructions of the State Bank of Vietnam on foreign exchange management.

Article 5. Autonomy of credit institutions

Credit institutions are solely responsible for their lending decisions. No organization or individual is allowed to illegally interfere with the autonomy of credit institutions in the lending and debt collection process.

Article 6. Principles of borrowing

Customers borrowing capital from credit institutions must ensure:

1. Use loan capital for the purpose agreed upon in the credit contract.

2. Repay the principal and interest of the loan on time as agreed in the credit contract.

Article 7. Loan conditions

Credit institutions consider and decide to lend when customers meet the following conditions:

1. Have civil legal capacity, civil conduct capacity and bear civil responsibility according to the provisions of law:

a) For Vietnamese corporate and individual borrowers:

- Legal entities must have civil legal capacity;

- Individuals and private business owners must have legal capacity and civil conduct capacity;

- The representative of the household must have legal capacity and civil conduct capacity;

- Representatives of cooperatives must have legal capacity and civil act capacity;

- General partners of a general partnership must have legal capacity and civil act capacity;

b) For borrowers who are foreign legal entities and individuals, they must have civil legal capacity and civil conduct capacity according to the laws of the country of which the legal entity is a national or the individual is a citizen, if such foreign law is prescribed by the Civil Code of the Socialist Republic of Vietnam, other legal documents of Vietnam or prescribed by international treaties to which the Socialist Republic of Vietnam is a signatory or participant.

2. Legal purpose of loan use.

3. Have financial capacity to ensure debt repayment within the committed period.

4. Have a feasible and effective investment project, production, business and service plan; or have a feasible investment project, life service plan that complies with the provisions of law.

5. Implement regulations on loan guarantees according to Government regulations and instructions of the State Bank of Vietnam.

Article 8. Loan types

Credit institutions consider and decide to lend to customers in short-term, medium-term and long-term categories to meet capital needs for production, business, services, life and development investment projects:

1. Short-term loans are loans with a loan term of up to 12 months;

2. Medium-term loans are loans with loan terms from over 12 months to 60 months;

3. Long-term loans are loans with a loan term of 60 months or more.

Article 9. Capital needs that are not eligible for loans

1. Credit institutions are not allowed to lend for the following capital needs:

a) To purchase assets and costs of forming assets that are prohibited by law from being bought, sold, transferred or converted;

b) To pay for the costs of carrying out transactions prohibited by law;

c) To meet the basic needs of transactions prohibited by law.

2. Credit institutions shall carry out debt restructuring in accordance with separate regulations of the State Bank of Vietnam.

Article 10. - Loan term

Credit institutions and customers shall agree on the loan term based on the production and business cycle, the capital recovery period of the investment project, the customer's ability to repay the debt and the credit institution's loan capital. For Vietnamese and foreign legal entities, the loan term shall not exceed the remaining term of operation according to the establishment decision or operating license in Vietnam;

For foreign individuals, the loan term does not exceed the period of time allowed to live and work in Vietnam.

Article 11. - Loan interest rate

1- The loan interest rate is agreed upon by the credit institution and the customer in accordance with the regulations of the State Bank of Vietnam.

2- The interest rate applied to overdue principal debt is determined by the credit institution and agreed upon with the customer in the credit contract, but does not exceed 150% of the loan interest rate applied during the loan term signed or adjusted in the credit contract.

Article 12.- Loan level

1- Credit institutions base on the customer's loan needs and debt repayment ability, and their own capital resources to decide on the loan amount.

2- The total outstanding loan limit for a customer is implemented according to the provisions of Article 18 of this Regulation.

3- Total outstanding loans to the subjects specified in Article 20 of this Regulation must not exceed 5% of the credit institution's equity.

Article 13.- Repayment of principal and interest on loans

1- The credit institution and the customer agree on the repayment of principal and interest on the loan as follows:

a) Principal repayment terms;

b) Loan interest payment terms are the same as principal payment terms or are separate terms;

c) Debt repayment and preservation of principal value by appropriate means, in accordance with the provisions of law.

2- When the principal or interest payment deadline comes, if the customer does not pay the debt on time and the principal or interest payment deadline is not adjusted or the principal or interest payment is not extended, the credit institution will transfer the entire outstanding debt to overdue debt.

3- Credit institutions and customers can agree on the conditions, loan interest, and fees payable in case the customer repays the loan early.

4- Repayment of loans in foreign currency: For loans in foreign currency, the principal and interest must be repaid in that foreign currency; in case of repayment in other foreign currencies or Vietnamese Dong, it must be done according to the agreement between the credit institution and the customer in accordance with the Government's regulations on foreign exchange management and the guidance of the State Bank of Vietnam.

Article 14.- Loan application

1- When in need of a loan, the customer shall send the credit institution a loan application and necessary documents proving eligibility for the loan as prescribed in Article 7 of this Regulation. The customer shall be legally responsible for the accuracy and legality of the documents sent to the credit institution.

2- Credit institutions guide the types of documents that customers need to send to credit institutions in accordance with the specific characteristics of each type of customer, type of loan and loan.

Article 15.- Loan appraisal and decision

1- Credit institutions develop loan approval processes based on the principles of ensuring independence and clearly defining individual responsibilities and responsibilities between the appraisal and loan decision stages.

2- Credit institutions review and evaluate the feasibility and effectiveness of investment projects, production, business and service plans or investment projects, life service plans and the customer's ability to repay loans to decide on lending.

3- Credit institutions shall specify and publicly post the maximum period for notifying customers of their decision to grant or deny a loan, from the time of receiving complete loan applications and necessary information from customers. In case of deciding not to grant a loan, the credit institution shall notify customers in writing, clearly stating the basis for refusing to grant a loan.

Article 16.- Lending methods

Credit institutions agree with borrowers on the application of lending methods;

1- Loan one time; Each time a loan is made, the customer and the credit institution carry out the necessary loan procedures and sign a credit contract.

2- Credit limit lending: The credit institution and the customer determine and agree on a credit limit maintained for a certain period of time.

3- Lending for investment projects Credit institutions lend capital to customers to carry out investment projects to develop production, business, services and investment projects to serve life.

4- Syndicated lending: A group of credit institutions jointly lends to a loan project or loan plan of a customer; in which, there is a credit institution acting as the focal point for arranging and coordinating with other credit institutions. Syndicated lending is carried out in accordance with the provisions of this Regulation and the Co-financing Regulation of credit institutions issued by the Governor of the State Bank.

5- Installment loans; When borrowing capital, the credit institution and the customer determine and agree on the amount of interest to be paid plus the principal amount divided into several installments during the loan term.

6- Lending according to the reserve credit limit: The credit institution commits to ensuring that it is ready to lend capital to customers within a certain credit limit. The credit institution and the customer agree on the validity period of the reserve credit limit and the fee paid for the reserve credit limit.

7- Lending through the issuance and use of credit cards: Credit institutions approve customers to use the loan amount within the credit limit to pay for goods and services and withdraw cash at ATMs or cash advance points that are agents of the credit institution. When lending, issuing and using credit cards, credit institutions and customers must comply with the regulations of the Government and the State Bank of Vietnam on the issuance and use of credit cards.

8- Overdraft lending: Is a loan in which the credit institution agrees in writing to allow the customer to spend more than the amount available in the customer's payment account in accordance with the regulations of the Government and the State Bank of Vietnam on payment activities through payment service providers.

9- Other lending methods not prohibited by law, in accordance with the provisions of this Regulation and the business conditions of the credit institution and the characteristics of the borrowing customer.

Article 17.- Credit contract

The lending of credit institutions and borrowers must be established in a credit contract. The credit contract must include the loan conditions, loan purpose, loan method, loan amount, interest rate, loan term, form of security, value of collateral, debt repayment method and other commitments agreed upon by the parties.

Article 18. - Loan limits

1- Total outstanding loans to a customer must not exceed 15% of the credit institution's equity, except for loans from capital sources entrusted by the Government, organizations and individuals. In case the capital demand of a customer exceeds 15% of the credit institution's equity or the customer needs to mobilize capital from many sources, credit institutions shall provide syndicated loans according to the regulations of the State Bank of Vietnam.

2- In special cases, credit institutions are only allowed to lend in excess of the lending limit prescribed in Clause 1 of this Article when permitted by the Prime Minister for each specific case.

3- Determination of equity capital of credit institutions as a basis for calculating the lending limits prescribed in Clauses 1 and 2 of this Article shall be implemented in accordance with regulations of the State Bank of Vietnam.

Article 19.- Cases where loans are not allowed

1- Credit institutions are not allowed to lend to customers in the following cases:

a) Members of the Board of Directors, Board of Supervisors, General Director (Director), Deputy General Director (Deputy Director) of a credit institution;

b) Officers and employees of that credit institution perform the task of appraising and deciding on loans;

c) Father, mother, wife, husband, children of members of the Board of Directors, Board of Supervisors, General Director (Director), Deputy General Director (Deputy Director).

2. The provisions of Clause 1 of this Article do not apply to cooperative credit institutions.

3. The application of the provisions at Point c, Clause 1 of this Article to borrowers who are fathers, mothers, spouses, or children of the Director or Deputy Director of a credit institution's branch shall be considered and decided by the credit institution.

Article 20. Lending restrictions

Credit institutions are not allowed to provide unsecured loans or loans with preferential conditions on interest rates and loan amounts to the following subjects:

1. Auditing organization, Auditor responsible for auditing at lending credit institution; Inspector performing inspection duties at lending credit institution; Chief accountant of lending credit institution;

2. Major shareholders of credit institutions;

3. An enterprise in which one of the entities specified in Clause 1, Article 77 of the Law on Credit Institutions owns more than 10% of the charter capital of that enterprise.

Article 21. Loan inspection and supervision

Credit institutions shall develop procedures and conduct inspections and supervision of the borrowing, use of loans and debt repayment processes of customers in accordance with the operational characteristics of the credit institution and the nature of the loan, in order to ensure efficiency and the ability to recover loans.

Article 22. Adjustment of principal and interest repayment period, extension of principal and interest repayment period

interest

1. Adjust principal repayment term, extend principal repayment:

a) In case the customer cannot repay the principal on time as agreed in the credit contract and has a written request, the credit institution will consider adjusting the repayment period.

b) In case the customer does not repay the principal in full within the loan term and has a written request for debt extension, the credit institution shall consider extending the debt. The debt extension period for short-term loans shall be a maximum of 12 months, and for medium-term and long-term loans shall be a maximum of 1/2 of the loan term agreed in the credit contract. In case the customer requests a debt extension beyond these terms due to objective reasons and to create conditions for the customer to be able to repay the debt, the Chairman of the Board of Directors or the General Director (Director) of the credit institution shall consider extending the debt.

Bank credit for coffee producers in Dak Lak province - 32

Comment