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Guarantee in loan relationships at credit institutions - 1


HANOI NATIONAL UNIVERSITY FACULTY OF LAW


TRAN PHU DUNG


GUARANTEES IN LOAN RELATIONSHIPS AT CREDIT INSTITUTIONS


MASTER'S THESIS IN LAW


HANOI NATIONAL UNIVERSITY FACULTY OF LAW


TRAN PHU DUNG


GUARANTEES IN LOAN RELATIONSHIPS AT CREDIT INSTITUTIONS

Major : Civil Law

Code : 60 38 30


MASTER'S THESIS IN LAW


Scientific supervisor : Dr. Pham Van Tuyet


INDEX




Cover page

Commitment Table of Contents

Page

INTRODUCTION

1

Chapter 1 : SOME GENERAL THEORETICAL ISSUES ON GUARANTEE

6

1.1.

Concept of guarantee

6

1.2.

Features of the guarantee

12

1.3.

Distinguish between loan guarantee and bank guarantee

14


Chapter 2 : PROVISIONS OF CURRENT LAW ON PROTECTION

LENDING IN LOAN RELATIONSHIPS AT ORGANIZATIONS

20

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Guarantee in loan relationships at credit institutions - 1

CREDIT

2.1. Subject of guarantee obligation 20

2.2. Form of guarantee 22

2.3. Relationship between the guarantor and the beneficiary 23

2.4. Rights and obligations of the parties in the guarantee relationship 24

2.4.1. Rights and obligations of the guarantor 24

2.4.2. Rights and obligations of the guaranteed party 29

2.4.3. Rights and obligations of the beneficiary 30

2.4.4. Rights and obligations of related parties 32

2.5. Time and deadline for performing guarantee obligations 33

2.5.1. Basis for performing guarantee obligations 33

2.5.2. Time limit for performing guarantee obligations 35

2.6. Guarantee contract 37


2.6.1.

Signing of guarantee contract

37

2.6.2.

Agreement of the parties in the guarantee contract

38

2.6.3.

Capacity of the parties to the guarantee contract

45

2.6.4.

Invalid guarantee contract

49

2.7.

Handling of guarantor's assets

52


Chapter 3 : CURRENT STATUS OF LAW APPLICATION AND DIRECTIONS FOR IMPROVING LAW ON GUARANTEE

57


IN LOAN RELATIONSHIPS AT CREDIT INSTITUTIONS


USED ​​IN THE PRESENT PERIOD

3.1. Practice of guaranteeing the performance of obligations in lending relationships of credit institutions

3.2. Resolving disputes related to guarantees at Court 64


3.3. Directions for perfecting the law on guarantees in lending relationships at credit institutions

3.3.1. Requirements for perfecting the law on guarantees 73

3.3.2. Recommendations for improving the law on guarantees 75

3.3.2.1. Building laws on guaranteeing the performance of obligations in banking activities is a special part of the law on guarantee.

to fulfill obligations

3.3.2.2. Perfecting legal regulations on bank guarantees 76

3.3.2.3. Perfecting regulations in legal documents related to bank guarantees

CONCLUSION 85

LIST OF REFERENCES 86

INTRODUCTION


1. The urgency of researching the topic

When the commodity economy was not yet developed, production activities were still on a small scale, so commercial relations were often limited. Transactions were mainly based on mutual trust, and if there were any risks, the parties would have to bear them together. That greatly affected production and business activities. However, people always tried to find ways to stabilize their business. Guarantee is one of the effective tools that people use to ensure this purpose. When conducting a transaction with a partner that they do not understand well, people often use a third party that is reputable to both parties as a bridge, to ensure that the work proceeds smoothly, minimizing risks due to lack of trust in each other. Guarantee activities have existed since ancient times and are increasingly developing. Especially in the present era, with the development of science and technology, information technology, transportation and the deep international division of labor, commercial activities have exploded strongly, crossing national borders, becoming a global activity. However, this also includes the risks that businesses must face. In any circumstance, businesses can encounter risks, but when participating in international trade, the possibility of encountering risks is higher. Risks in international trade are very diverse, which can be risks occurring during the transportation of goods due to unexpected natural disasters, fluctuations in exchange rates or unusual fluctuations in politics, economics and society globally that businesses will not foresee. In addition, because the partners are in different countries, there is not enough information about each other, leading to a lack of trust between businesses, affecting commercial activities and reducing efficiency in production and business. To overcome this, one or several businesses themselves

Enterprises do not have enough information and financial capacity to evaluate partners and assess risks in commercial transactions by themselves. Therefore, it is necessary to have a guarantee for these transactions to take place safely, increasing the reputation between business partners. The best solution is for a third party with prestige and large financial potential to act as an intermediary to ensure the performance of the contract. A credit institution with its characteristics and functions can assume this role as a guarantee intermediary. A credit institution (commercial bank) is a monetary business organization, playing the role of a financial intermediary in the economy. Through the process of formation and development, commercial banks have built for themselves financial capacity and human resources with enough prestige to act as a guarantor for transactions. The important thing is that commercial banks promote their prestige, so in any case, the bank does not refuse to pay the debt in the guarantee. This may be the outstanding advantage of commercial banks over other economic units and organizations. Moreover, banks consider issuing guarantees as a form of credit, so they hold collateral and are ready to convert it into cash to pay debts under the guarantee. This is also the basic thing that creates trust for those who receive guarantees from banks. Because guarantees in general and basically are issued by commercial banks, people often call guarantees by a compound word, bank guarantee.

Therefore, in order to create a complete legal basis for credit institutions and customers to operate smoothly, the legal system on banking in general and on loan guarantees in particular is constantly being improved by our State, creating a safe and open legal corridor, in accordance with international standards and practices and practical conditions of Vietnam. It can be said that legal regulations on loan guarantees are very important regulations, directly related to credit activities of credit institutions as well as for loan customers, in order to create favorable conditions for credit institutions, individuals, and enterprises in civil, economic and commercial transactions as well as

in credit activities (enhancing the responsibility of borrowers - using loans effectively, for the right purposes and repaying debts on time), at the same time, contributing to ensuring loan recovery for credit institutions.

2. Research status of the topic

Regarding the study of legal provisions on guarantees, there have been many research topics on measures to ensure the performance of civil obligations; or in-depth research on ensuring the performance of bank credit contracts and bank guarantees. Some research works in this legal field include: Master's thesis in Law: "Regulations on ensuring the performance of credit contracts - current situation and solutions ", by author Tran Thi Thu Thuy; Master's thesis in Law: " Pledge and mortgage to ensure civil obligations ", by author Pham Cong Lac; Master's thesis in Law: " Bank loan guarantees - current situation and solutions ", by author Le Thu Hien; Master's thesis in Law: " Measures to ensure the performance of bank credit contracts ", by author Truong Thi Kim Dung; Master's thesis in Law: " Legal issues on bank guarantees ", by author Nguyen Thanh Long; Master's thesis in Law: " Notarization of economic contracts and agreement on measures to ensure the performance of economic contracts, current situation and solutions ", by author Nguyen Thi Hanh; Master's thesis in Law: " Guarantee to perform obligations in banking activities " by author Nguyen Thi Thao.

There are also articles related to the issue of ensuring the performance of obligations published in specialized journals. Specifically, the article: " On measures to ensure credit contracts " by Associate Professor, Dr. Le Hong Hanh; the article: " The nature of measures to ensure the performance of civil obligations " by Dr. Pham Cong Lac; the article: " Discussion on guarantee measures " by Dr. Pham Van Tuyet.

The above works have all studied legal issues related to the guarantee regime. However, most of these works have studied guarantees in general, and none of them have gone into depth to study the regulations on

Guarantees in loan relationships at credit institutions, as the basic provisions for specific specialized laws. In order to have an overall view of the theoretical and practical basis of guarantee activities, from which recommendations can be made to improve the law on guarantees in banking law in the current development conditions, therefore, we chose the topic: " Guarantees in loan relationships at credit institutions " as the topic of our master's thesis, contributing to finding solutions to improve the effectiveness of implementing loan security measures of credit institutions in practice, as well as the development and improvement of the law on bank guarantees.

3. Purpose of research topic

Through a systematic study of the theoretical basis of guarantees in civil transactions in general, guarantees in banking activities in particular, and at the same time reviewing and evaluating the current legal status and practice of guarantee activities to perform obligations in banking in our country in the past, we hope to clarify the theoretical basis and nature of the law on guarantees in lending relationships at credit institutions, as a premise for perfecting the law on guarantees in banking activities of Vietnam in the current conditions of international economic integration.

4. Subject and scope of the research topic

- The thesis studies theoretical and practical issues in applying regulations on loan guarantees in general and guarantee measures in particular; on that basis, it proposes shortcomings and solutions related to the law on loan guarantees to improve the efficiency of bank credit activities.

- Scope of research: current legal regulations on loan guarantees in general and in-depth analysis of loan guarantees in particular. The analysis process is associated with the practical operations of credit institutions in recent years.

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