Banks allowed to transfer loans into capital stock
In accordance with the Circular No. 11/2015/TT-NHNN of the State Bank of Vietnam providing guidelines on handling with loans of agriculture and forestry companies when restructuring, renovating according to the Decree No. 118/2014/ND-CP dated December 17, 2014 of the Government, credit institutions shall agree with agriculture and forestry companies to transfer loans into capital stock (for equitized agriculture and forestry companies).
If agriculture and forestry companies hand over the land for the local to manage and assets are formed with loans from credit institutions, agriculture and forestry companies shall determine the value of assets formed from a part or entire of loans from credit institutions (assets formed from loans) at the time of handing over as a basis to determine the loans (principal and interest) equivalent to the value formed from loans. The determination of value of assets formed from loans shall be done according to current regulations.
Handing over assets formed from loans must be written down with signatures of parties: agriculture and forestry companies, organizations, households, individuals and credit institutions.
The credit institutions have responsibilities to examine, review agriculture and forestry companies under the list of companies that need restructuring and renovating to handle with loans as stipulated under this Circular and other current regulations; supervise, manage loans for agriculture and forestry companies before and after restructuring and renovating and report to the State Bank (Department of Credit for all economic sectors) quarterly no later than the tenth of the first month of the beginning quarter since Quarter IV/2015 on results of handling with loans for agriculture and forestry companies.
This Circular takes effect on October 05, 2015 and replaces the Circular No. 02/2005/TT-NHNN dated April 11, 2005.