HA NOI (VNS)— The Vietnamese Government will not be responsible for foreign loans that it has not guaranteed , according to a new prime ministerial decree.
The decree will come into effect on February 15, 2014.
Borrowers impacted by the new decree include enterprises that have been established and are operating under the Law of Enterprises, credit institutions and foreign bank branches operating under the Law on Credit Institutions, or co-operatives and co-operative associations operating under the Law on Co-operatives.
The decree requires the State Bank of Viet Nam and the ministries of Finance and Planning and Investment to watch closely the situation of foreign loans against the nation's macro-economic indicators and report their findings to the Prime Minister.
Their findings will be the basis for the Prime Minister to approve ceilings for enterprises' foreign loans and repayments.
In case the market requires increases in capital mobilisation, surpassing the limit for enterprises' self loans and repayments, requests should be submitted to the Prime Minister for a final decision.
The borrowers also have to report their capital withdrawals and payments of foreign loans, and repaying signed by themselves, as requested.
Ministries and SBV will be responsible for keeping track of cash flows related to foreign loans and carrying out regular inspections, examinations and supervision.
Individuals and organisations violating the decree's regulations will be liable for administrative penalties or could be held criminally responsible. — VNS