Circular No. 61/2024/TT-NHNN dated December 31, 2024 on bank guarantee
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STATE
BANK OF VIETNAM |
SOCIALIST
REPUBLIC OF VIETNAM |
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No. 61/2024/TT-NHNN |
Hanoi, December 31, 2024 |
CIRCULAR
ON BANK GUARANTEE
Pursuant to the Civil Code dated November 24, 2015;
Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;
Pursuant to the Law on Credit Institutions dated January 18, 2024;
Pursuant to the Law on Real Estate Business dated November 28, 2023;
Pursuant to the Ordinance on Foreign Exchange dated December 13, 2005 and the Ordinance on amendments to the Ordinance on Foreign Exchange dated March 18, 2013;
Pursuant to Decree No. 102/2022/ND-CP dated December 12, 2022 of the Government on functions, tasks, powers, and organizational structure of the State Bank of Vietnam; Decree No. 146/2024/ND-CP dated November 6, 2024 of the Government on amendments to and annulment of certain provisions of Decree No. 102/2022/ND-CP dated December 12, 2022 of the Government on functions, tasks, powers, and organizational structure of the State Bank of Vietnam, and Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government on the organization and operation of banking inspection and supervision, as amended by Decree No. 43/2019/ND-CP dated May 17, 2019 of the Government;
At the request of the Director of the Credit Department for Economic Sectors;
The Governor of the State Bank of Vietnam promulgates a Circular on the bank guarantee.
Chapter I
GENNERAL PROVISIONS
Article 1. Scope
This Circular provides regulations on bank guarantee operations conducted by credit institutions and foreign bank branches for customers.
Article 2. Regulated entities
1. Credit institutions, including: commercial banks, cooperative banks, and general financial companies.
2. Foreign bank branches (FBBs).
3. Individuals and organizations related to guarantee operations, including both residents and non-residents.
Article 3. Interpretation of terms
For the purposes of this Circular, the following terms are defined as follows:
1. “Bank guarantee” refers to a form of credit extension whereby the guarantor, being a credit institution or a FBB, commits to the obligee that it will fulfill the financial obligation on behalf of the obligor in the event that the obligor fails to perform or inadequately performs its committed obligation to the obligee. The customer shall be subject to mandatory debt acknowledgement and repayment to the guarantor as agreed.
2. “Counter-guarantee” refers to a type of bank guarantee whereby the counter-guarantor commits to the guarantor that it will fulfill the financial obligation to the guarantor in the event that the guarantor is required to fulfill the financial obligation on behalf of the obligor. The customer of the counter-guarantor shall be subject to mandatory debt recognition and repayment to the counter-guarantor as agreed.
3. “Guarantee confirmation” refers to a type of bank guarantee whereby the guarantee-confirming party commits to the obligee to ensure the performance capability of the guarantor toward the obligee. The guarantee-confirming party shall fulfill the financial obligation on behalf of the guarantor if the guarantor fails to perform or inadequately performs its committed obligation to the obligee. The guarantor shall be subject to mandatory debt acknowledgement and repayment to the guarantee-confirming party, and at the same time, the customer of the guarantor shall be subject to mandatory debt acknowledgement and repayment to the guarantor as agreed.
4. “Guarantee for the sale or lease-purchase of off-plan housing” (hereinafter referred to as off-plan housing guarantee) refers to a bank guarantee whereby the guarantor, being a commercial bank or a FBB, commits to the obligee, being the home buyer or the tenant-buyer (hereinafter referred to as the buyer), that it will fulfill the financial obligation on behalf of the obligor, being the real estate project owner (hereinafter referred to as the project owner), in the event that the project owner fails to hand over the house to the buyer as committed upon the due date and fails to perform or inadequately performs the financial obligation under the signed house purchase or lease-purchase contract. The project owner shall be subject to mandatory debt acknowledgement and repayment to the guarantor as agreed. In cases where a commercial bank or a FBB provides the guarantee based on a counter-guarantee, the counter-guarantor commits to the commercial bank or FBB that it will fulfill the financial obligation to the commercial bank or FBB in the event that the latter is required to fulfill the financial obligation on behalf of the project owner. The project owner shall be subject to mandatory debt acknowledgement and repayment to the counter-guarantor as agreed.
5. “Co-guarantee” refers to a form of syndicated credit extension whereby two (2) or more credit institutions, FBBs jointly provide a guarantee; or a credit institution, FBB, and a foreign credit institution jointly provide a guarantee.
6. “Guarantor” refers a credit institution or FBB that provides a guarantee for the obligor. In cases of co-guarantee, counter-guarantee, and guarantee confirmation, the guarantor also includes foreign credit institutions.
7. “Obligor” refers to an organization (including credit institutions, FBBs, and foreign credit institutions) or an individual that has an obligation to the obligee and is guaranteed by the guarantor or the counter-guarantor.
8. “Obligee” refers to an organization (including credit institutions, FBBs, and foreign credit institutions) or an individual that is entitled to the guarantee issued by the guarantor or the guarantee-confirming party.
9. “Counter-guarantor” refers to a credit institution, FBB, or foreign credit institution that provides a counter-guarantee for the obligor.
10. “Guarantee-confirming party” refers to a credit institution, FBB, or foreign credit institution that provides a guarantee confirmation for the guarantor.
11. Customer of a credit institution or FBB (hereinafter referred to as the customer) refers to an organization (including credit institutions, FBBs, and foreign credit institutions) or an individual, specifically as follows:
a) In a bank guarantee (excluding counter-guarantee and guarantee confirmation), the customer of the guarantor is either the obligor or the entity requesting the credit institution or FBB to issue a guarantee for the obligor;
b) In a counter-guarantee, the customer of the counter-guarantor is either the obligor or the entity requesting the credit institution or FBB to issue a counter-guarantee for the obligor; the customer of the guarantor is the counter-guarantor;
c) In a guarantee confirmation, the customer of the guarantee-confirming party is the guarantor; the customer of the guarantor is either the obligor or the entity requesting the credit institution or FBB to issue a guarantee for the obligor.
12. “Guarantee issuance agreement” refers to an agreement between the guarantor, the counter-guarantor, or the guarantee-confirming party and the customer, as well as any other relevant parties (if applicable), regarding the issuance of a bank guarantee, counter-guarantee, or guarantee confirmation for the customer.
13. “Written commitment to issue a guarantee letter for off-plan housing (hereinafter referred to as the written commitment to issue a guarantee letter) refers to the written commitment by the guarantor to the project owner, confirming that the guarantor will issue a guarantee letter for all buyers who opt for a guarantee under the project of the project owner, which has been approved for a guarantee by the guarantor, as stipulated in the guarantee issuance agreement.
14. “Guarantee commitment” refers to a commitment issued by the guarantor, the counter-guarantor, or the guarantee-confirming party in one of the following forms:
a) “Guarantee letter” refers to a commitment by the guarantor to the obligee, ensuring that the guarantor will fulfill the financial obligations on behalf of the obligor if the obligor fails to fulfill or inadequately fulfills its obligations to the obligee.
In the case of a counter-guarantee and guarantee confirmation, the guarantee letter also includes the commitment of the counter-guarantor to the guarantor and the commitment of the guarantee-confirming party to the obligee;
b) “Guarantee contract” refers to an agreement between the guarantor and the obligee, as well as any other relevant parties (if applicable), regarding the guarantor’s commitment to fulfilling financial obligations on behalf of the obligor if the obligor fails to fulfill or inadequately fulfills its obligations to the obligee.
In the case of a counter-guarantee and guarantee confirmation, the guarantee contract also includes the agreement between the counter-guarantor and the guarantor, along with other relevant parties (if applicable), and between the guarantee-confirming party and the obligee, along with other relevant parties (if applicable).
For off-plan housing guarantees, only the guarantee letter format is issued.
15. “Financial obligations of the project owner to the buyer in a off-plan housing guarantee (hereinafter referred to as financial obligations of the project owner) refer to the amount that the project owner is obligated to pay to the buyer if the project owner fails to hand over the housing unit on time as committed in the purchase or lease-purchase agreement. This includes: The amount the project owner has received in advance from the buyer after the buyer has received the guarantee letter from the guarantor; any other amount (if applicable) that the project owner is obligated to pay to the buyer under the purchase or lease-purchase agreement.
Article 4. Regulations on foreign exchange management in guarantees
1. The issuance of guarantees in foreign currency by credit institutions and FBBs must comply with the scope of foreign exchange activities in the domestic market and the international market as stipulated in their respective operating licenses.
2. Credit institutions and FBBs may only provide guarantees in foreign currency for customers with financial obligations denominated in foreign currency in accordance with applicable laws.
Article 5. Cases where guarantees are prohibited, restricted, and subject to credit limits
When providing guarantees, credit institutions and FBBs must comply with the provisions of the Law on Credit Institutions and the regulations of the State Bank of Vietnam (hereinafter referred to as the "State Bank") regarding cases where credit extension is prohibited, restricted, or subject to credit limits.
Article 6. Determination of guarantee balance
1. The guarantee balance for a customer or a customer and related persons includes the outstanding balance of issued guarantee commitments, issued counter-guarantee commitments, and issued guarantee confirmation commitments for that customer, that customer, and related persons.
2. The guarantee balance for a customer or a customer and the related persons of that customer is determined from the date of issuance of the guarantee commitment.
3. The balance for off-plan housing guarantee shall be determined in accordance with Clause 7, Article 13 of this Circular.
Article 7. Use of language
1. The guarantee issuance agreement and guarantee commitment must be made in Vietnamese, except for the cases specified in Clause 2 of this Article.
2. Credit institutions and FBBs may agree with relevant parties to use a foreign language in the following cases:
a) The guarantee transaction falls under civil relations involving foreign elements as prescribed by the Civil Code;
b) The guaranteed obligation arises from the implementation of projects funded by international financial institutions in accordance with the regulations of the State Bank on limits and prudential ratios in the operations of banks and FBBs;
c) The guaranteed obligation arises from participation in an international bidding package;
d) The guarantee transaction is issued through the SWIFT system.
3. In cases where a foreign language is used, upon request from the competent authority, documents or data messages must be translated into Vietnamese, with certification from the legal representative of the credit institution or FBB, or notarized or certified, attached to the foreign-language version.
Article 8. Application of commercial practices and dispute resolution
1. Parties involved in bank guarantees, counter-guarantees, guarantee confirmations, and co-guarantees may agree to apply commercial practices in accordance with Article 3 of the Law on Credit Institutions.
2. The resolution of disputes arising from guarantee transactions shall be carried out based on the agreements between the parties in compliance with legal regulations. In cases where the guarantee involves foreign elements or the parties choose to apply international commercial practices, they may agree on the governing law and the dispute resolution authority (including foreign courts or international commercial arbitration) to resolve disputes related to the guarantee transaction.
Article 9. Electronic guarantee
1. Credit institutions, FBBs, and customers may opt to conduct bank guarantee operations through electronic means (hereinafter referred to as "electronic guarantee").
The implementation of electronic guarantee must comply with the provisions of this Circular and relevant laws on anti-money laundering; electronic transactions, personal data protection; online service security in the banking sector, and other applicable legal regulations.
2. When identifying and verifying customer information through electronic means for customers establishing a relationship with a credit institution or FBB for the first time (except for cases where the customer submits a request via authenticated electronic messaging through the SWIFT system or uses an electronic signature in accordance with the law), the credit institution or FBB shall proceed as follows:
a) For customers who are residents: Credit institutions and FBBs shall identify and verify customer information in accordance with the regulations of the State Bank of Vietnam on the opening and use of payment accounts at payment service providers;
b) For customers who are non-residents: Credit institutions and FBBs shall identify and verify customer information based on their own risk assessment, selecting and determining appropriate measures, methods, and technologies to ensure security while assuming any associated risks.
3. Credit institutions and FBBs shall independently determine the measures, methods, and technologies applied in electronic guarantee, whether for the entire process or specific stages, assume any associated risks, and meet the following minimum requirements:
a) The measures, methods, and technologies selected by the credit institution or FBB must comply with security, safety, and confidentiality regulations set forth by the State Bank of Vietnam;
b) Appropriate electronic transaction authentication methods must be applied to customers when conducting electronic transactions in the course of electronic guarantee, in accordance with relevant legal provisions;
c) Full and detailed storage and maintenance of documents, information, and customer identification data throughout the electronic guarantee process must be ensured. The information and data must be securely stored, backed up, and maintained in a complete and intact manner to facilitate inspection, verification, and customer authentication during the electronic guarantee process, as well as for handling disputes, complaints, and providing information upon request from competent authorities. The retention and maintenance period shall comply with the provisions of laws on anti-money laundering and electronic transactions.
d) Credit institutions and FBBs must conduct inspections and assess the security and safety levels of measures, methods, and technologies applied, ensuring timely upgrades and updates in case of security vulnerabilities;
dd) Clearly define the roles and responsibilities of each individual and department involved in developing, establishing, and operating the information system supporting the appraisal and credit approval process in electronic guarantee. In case of arising risks, the bank must establish mechanisms to identify the responsible individuals or departments and promptly address any issues or risks to ensure efficiency and security in the execution of electronic guarantee.
4. If customer identification and verification are conducted electronically, the value of each guarantee commitment (if the guaranteed amount is in a foreign currency, the conversion rate shall be based on the guarantor's exchange rate at the time of issuance) issued to an individual customer shall not exceed VND 4,000,000,000 (four billion Vietnamese dong), and for an institutional customer shall not exceed VND 45,000,000,000 (forty-five billion Vietnamese dong), except for the following cases:
a) The customer identification information is authenticated by a competent state authority or electronically verified through an electronic authentication service provider in accordance with the law on electronic identification and authentication;
b) The customer submits a guarantee request via authenticated electronic messaging through the SWIFT system;
c) The customer's information and guaranteed obligation are accurately matched through the customs electronic payment gateway or the national bidding network system;
d) The customer uses an electronic signature in accordance with the law when requesting a guarantee or signing a guarantee issuance agreement with the credit institution or FBB;
dd) The customer is a credit institution or a FBB.
5. The information system used for conducting electronic guarantee must comply with the regulations on ensuring information system security at Level 3 or higher, in accordance with the law on information system security classification and the regulations of the State Bank of Vietnam on information system security in banking operations.
Chapter II
SPECIFIC PROVISIONS
Article 10. Scope of guarantee
The guarantor may commit to guaranteeing either a part or the entirety of the financial obligation that the obligor is required to fulfill toward the obligee.
Article 11. Requirements to be satisfied by customers
1. A credit institution or FBB shall consider and decide on issuing a guarantee, counter-guarantee, or guarantee confirmation for a customer when the customer meets the following requirements:
a) Has full passive legal capacity, active legal capacity as prescribed by law;
b) The guaranteed obligation is a lawful financial obligation;
c) Is assessed by the credit institution or FBB issuing the guarantee as having the ability to repay the amount that the credit institution or FBB is required to pay on behalf of the obligor when fulfilling the guarantee obligation.
2. Credit institutions and FBBs are not permitted to issue guarantees for the payment obligations of bonds issued by enterprises if the purpose of such bond issuance is for: a) restructuring the debts of the issuing enterprise itself; contributing capital or acquiring shares in another enterprise; and expanding operating capital.
Article 12. Guarantee for customers who are non-residents
1. A credit institution or FBB may only issue guarantees for customers that are organizations classified as non-residents and must satisfy one of the following requirements (customers that are foreign credit institutions are not subject to this requirement):
a) The customer is an economic organization established and operating overseas with capital contributed by a Vietnamese enterprise in the form of investment as specified in points a and c, clause 1, Article 52 of the Law on Investment, or in another form of investment as specified in point dd, clause 1, Article 52 of the Law on Investment;
b) The customer has fully deposited 100% of the guarantee value or has collateral covering 100% of the guarantee value, consisting of the customer's assets, including deposit balances at the same credit institution or FBB issuing the guarantee, and certificates of deposit issued by the same credit institution or FBB issuing the guarantee;
c) The obligee is a resident.
2. FBBs are not permitted to issue guarantees in foreign currency for corporate customers who are non-residents, except in cases where the obligee is a resident.
3. When issuing guarantees in foreign currency for customers who are non-residents, credit institutions and FBBs must:
a) Comply with the regulations of the State Bank of Vietnam on foreign exchange management concerning offshore lending and the recovery of guaranteed debts for non-residents;
b) Implement a credit risk assessment and management process, including risk assessment for guarantees issued to non-residents.
4. In addition to the provisions of this Article, other matters related to guarantees for customers who are non-residents must comply with the corresponding regulations set forth in this Circular.
Article 13. Guarantee for off-plan housing
1. Commercial banks and FBBs shall consider and decide to provide guarantees for project owners if:
a) The project owner meets all the requirements specified in Article 11 of this Circular (except in cases where the commercial bank or FBB guarantees the project owner based on a counter-guarantee);
b) The project owner has received a written confirmation from the province-level real estate business regulatory authority stating that the housing units are eligible for sale or lease-purchase.
2. Procedures for implementing guarantees for off-plan housing:
a) Based on the request of the project owner or the counter-guarantor, the commercial bank or FBB shall consider, appraise, and decide to provide a guarantee for the project owner;
b) The guarantor and the project owner shall sign a guarantee issuance agreement in accordance with Article 26 of the Law on Real Estate Business and the provisions of Clause 12, Article 3, and Article 15 of this Circular;
c) Based on the guarantee issuance agreement, the guarantor shall issue a written commitment to issue a guarantee letter for the project owner, who shall then provide a copy of this document to the buyer when signing the purchase or lease-purchase contract for the housing unit;
d) After signing the purchase or lease-purchase contract, which includes the project owner's financial obligations, the project owner shall submit the contract to the guarantor to request the issuance of a guarantee letter for the buyer;
dd) The guarantor, based on the purchase or lease-purchase contract, the guarantee issuance agreement, and the written commitment to issue the guarantee letter, shall issue the guarantee letter and send it to the project owner, who shall then provide it to the buyer.
3. Validity period and content of the guarantee issuance agreement:
a) The guarantee issuance agreement shall be effective from the date of signing until the guarantee obligations of all guarantee letters issued to the buyers are terminated in accordance with Article 23 of this Circular, and all obligations of the project owner to the guarantor under the guarantee issuance agreement have been fulfilled; unless the parties agree to terminate the guarantee issuance agreement before its expiration;
b) In addition to the contents specified in Clause 2, Article 15 of this Circular (excluding the provisions in points h and i in the case of a guarantee based on a counter-guarantee), the guarantee issuance agreement must also include a provision that the guarantor is obligated to issue the guarantee letter to the buyer before the scheduled handover of the housing unit as committed in the purchase or lease-purchase contract when receiving the purchase or lease-purchase contract from the project owner and to send the guarantee letter to the project owner for provision to the buyer.
4. Validity period and content of the written commitment to issue a guarantee letter:
a) The written commitment to issue a guarantee letter shall be effective from the date of signing until the completion of the issuance of guarantee letters for all buyers before the scheduled handover of the housing unit as committed in the purchase or lease-purchase contract, or until the guarantee issuance agreement expires (whichever occurs first);
b) The written commitment to issue a guarantee letter must include the following contents:
(i) Information about the guarantor and the project owner;
(ii) Validity period of the document;
(iii) Information on the guaranteed project or the guaranteed portion of the project (if only a portion of the project is guaranteed);
(iv) Commitment of the guarantor to issue guarantee letters to all buyers who choose to be guaranteed under the project of the project owner that has been approved for guarantee by the guarantor;
(v) The financial obligations of the project owner to the buyer, guaranteed by the commercial bank or FBB, refer to the amount the project owner is obligated to pay the buyer if the project owner fails to hand over the housing unit on time as committed in the signed purchase or lease-purchase contract, including: The amount the project owner has received in advance from the buyer after the buyer has received the guarantee letter from the guarantor; any other amount (if applicable) that the project owner is obligated to pay to the buyer under the purchase or lease-purchase agreement;
(vi) The documents that the buyer must submit to the guarantor to request the performance of the guarantee obligation must include the guarantee letter issued by the commercial bank or FBB to the buyer.
5. Validity period and content of the guarantee letter:
a) The guarantee letter shall be effective from the date of issuance until at least 30 days after the deadline by which the project owner must fulfill its financial obligations to the buyer in the event that the project owner fails to hand over the housing unit as committed in the purchase or lease-purchase contract, unless the guarantee obligation is terminated under Article 23 of this Circular. If the guarantor and the project owner terminate the guarantee issuance agreement before its expiration, the guarantee letters issued to previous buyers shall remain valid until the guarantee obligation is terminated;
b) In addition to the contents specified in Clause 1, Article 16 of this Circular, the guarantee letter must also clearly state the guaranteed financial obligations of the project owner and specify that the documents submitted by the buyer to the guarantor to request the performance of the guarantee obligation must include the guarantee letter issued by the commercial bank or FBB to the buyer.
6. Maximum guarantee amount per buyer shall not exceed the total amount the project owner is permitted to receive in advance from the buyer under Article 25 of the Law on Real Estate Business, plus any other amounts (if applicable) specified in the purchase or lease-purchase contract.
7. Outstanding guarantee balance in off-plan housing guarantees:
a) The outstanding guarantee balance for the project owner or the counter-guarantor shall be determined based on the financial obligations of the project owner. The outstanding guarantee balance shall gradually decrease as the guarantee obligations to each buyer are terminated in accordance with Article 23 of this Circular;
b) The outstanding guarantee balance shall be recorded at the time the project owner notifies the guarantor of the amount received in advance from the buyers as specified in point c of this clause, along with any other amounts (if applicable) stipulated in the purchase or lease-purchase contract;
c) The guarantor and the project owner shall agree on the timeline for notifying and updating the amounts received in advance from buyers during the month, which must not be later than the last working day of the month, as the basis for determining the outstanding guarantee balance. The project owner shall be legally responsible for accurately notifying the guarantor of the amount and the timing of advance payments received from buyers.
8. Rights and obligations of the guarantor:
a) The guarantor has the following rights:
(i) To refuse to issue a guarantee letter to the buyer if the purchase or lease-purchase contract for the housing unit does not comply with relevant legal regulations or after the guarantee issuance agreement has been terminated;
(ii) To refuse to perform the guarantee obligation for amounts that do not fall within the financial obligations of the project owner, amounts paid by the buyer exceeding the percentage stipulated in Article 25 of the Law on Real Estate Business, or in cases where the buyer fails to present the guarantee letter issued to them by the guarantor.
b) The guarantor has the following obligations:
(i) To issue the guarantee letter before the handover deadline specified in the purchase or lease-purchase contract for the housing unit upon receiving a valid purchase or lease-purchase contract and submit it to the project owner;
(ii) In the event that the guarantor and the project owner terminate the guarantee issuance agreement before its expiration, the guarantor must, no later than the following working day, publicly announce on its official website and notify in writing the provincial-level housing management authority of the locality where the project is located, clearly stating that the guarantor will no longer issue guarantee letters for buyers entering into purchase or lease-purchase contracts with the project owner after the termination of the guarantee issuance agreement. For guarantee letters already issued to buyers prior to the termination, the guarantor must continue to fulfill its commitments until the guarantee obligation is terminated;
(iii) To perform the guarantee obligation by paying the replacement amount corresponding to the financial obligations of the project owner, based on the guarantee claim dossier submitted by the buyer, in accordance with the conditions for performing the guarantee obligation stipulated in the guarantee letter.
9. Rights and obligations of the project owner:
a) The project owner has the following rights: To request the guarantor to issue guarantee letters for all buyers who opt for a guarantee within the off-plan housing project covered by the guarantee, provided that the guarantee commitment document remains in effect;
b) The project owner has the following obligations:
(i) To deliver the guarantee letter issued by the guarantor to the buyer after receiving it from the guarantor, as stipulated in Clause 6, Article 26 of the Law on Real Estate Business;
(ii) In the event that the guarantor and the project owner terminate the guarantee issuance agreement before its expiration, no later than the following working day, the project owner must publicly announce this termination on its official website (if available) and notify in writing the provincial-level housing management authority of the locality where the project is located regarding the termination of the guarantee for the project owner. The project owner must cease providing the guarantee commitment document to buyers once it becomes invalid due to the expiration of the guarantee issuance agreement between the project owner and the guarantor;
(iii) To accurately notify the guarantor of the advance payments received from each buyer and any other amounts (if applicable) within the agreed timeframe as stipulated in Point c, Clause 7 of this Article.
10. The buyer has the following rights:
a) To receive the guarantee letter issued by the guarantor, delivered by the project owner;
b) To request the guarantor to fulfill the guarantee obligation for the project owner's financial obligations by presenting the guarantee letter along with the required supporting documents in accordance with the terms of the guarantee letter.
11. In addition to the provisions of this Article, other matters related to the guarantee for off-plan housing shall be implemented in accordance with the relevant provisions of this Circular.
Article 14. Application for a guarantee
1. The application for a guarantee includes the following primary documents:
a) Guarantee application form;
b) Documents related to the customer, including information about related persons of the customer as stipulated in the Law on Credit Institutions, if the total outstanding credit balance of the customer at the credit institution or FBB (including the amount requested for the guarantee) is equal to or greater than 0.1% of the owner's equity of the credit institution or FBB as of the most recent working day's end before the customer applies for the guarantee, except where the customer is a foreign credit institution. If the credit institution or FBB has negative owner's equity, this percentage shall be applied to charter capital or allocated capital (for FBBs). Information on related persons includes:
(i) Information on related individuals, including full name, personal identification number for Vietnamese citizens; nationality, passport number, issuance date, and issuing authority for foreign individuals; and relationship with the customer;
(ii) Information on related organizations, including name, business registration number, registered office address, enterprise registration certificate number or equivalent legal document, legal representative, and relationship with the customer.
c) Documents related to the guaranteed obligation;
d) Documents related to collateral (if applicable);
dd) Documents related to other relevant parties (if applicable).
2. Based on the actual guarantee activities of the credit institution or FBB and the specific characteristics of different customer groups and guarantee execution methods (traditional or electronic means), the credit institution or FBB shall provide detailed guidance on the required documents to be submitted for appraisal and consideration of the guarantee issuance.
Article 15. Guarantee issuance agreement
1. To issue a guarantee for a customer, the credit institution or FBB and the customer shall enter into a guarantee issuance agreement. In the case of issuing a guarantee based on a counter-guarantee or guarantee confirmation, the guarantor is not required to enter into a guarantee issuance agreement with the counter-guarantor or the guarantee-confirming party.
2. The guarantee issuance agreement must include the following contents:
a) Applicable law. If the applicable law is not explicitly specified, it shall be understood that the parties agree to apply Vietnamese law;
b) Information on the parties involved in the guarantee relationship;
c) The guaranteed obligation;
d) The guarantee amount and guarantee currency;
dd) Form of issuance of the guarantee commitment;
e) Conditions for enforcing the guarantee obligation;
g) Rights and obligations of the parties;
h) Guarantee fee;
i) Agreement on mandatory debt assumption, interest rate applicable to the substitute payment amount, and debt repayment obligation when the guarantee obligation is enforced;
k) Reference number, signing date, and validity of the guarantee issuance agreement;
l) Dispute resolution mechanism;
m) Other provisions not contrary to applicable laws.
3. Any amendments, supplements, or cancellations of the contents of the guarantee issuance agreement shall be agreed upon and decided by the relevant parties, ensuring compliance with applicable laws.
Article 16. Guarantee commitment
1. Based on the guarantee issuance agreement, the guarantor or the guarantee-confirming party shall issue a guarantee commitment to the obligee with the following contents:
a) Applicable law. If the applicable law is not explicitly specified, it shall be understood that the parties agree to apply Vietnamese law;
b) Reference number of the guarantee commitment;
c) Information on the parties involved in the guarantee relationship;
d) Date of guarantee issuance, effective date of the guarantee, and/or conditions under which the guarantee becomes effective;
dd) Expiry date and/or conditions under which the guarantee expires;
e) Guarantee amount and guarantee currency;
g) Guaranteed obligation;
h) Conditions for enforcing the guarantee obligation;
i) Documentation required to enforce the guarantee obligation, including the demand for enforcement and a list of supporting documents and materials;
k) Method for the obligee to verify the authenticity of the guarantee commitment;
l) Other provisions not contrary to applicable laws.
2. Any amendments, supplements, or cancellations of the contents of the guarantee commitment shall be agreed upon by the relevant parties in accordance with the guarantee issuance agreement and in compliance with applicable laws.
3. For guarantee commitments issued via an international communication network, credit institutions and FBBs shall follow the contents and issuance procedures prescribed by the international communication network. Credit institutions and FBBs must establish monitoring and management procedures for issuing guarantees under these circumstances to ensure safety and efficiency.
Article 17. Authority to sign guarantee issuance agreements, guarantee commitments, and guarantee issuance commitment letters
1. The guarantee issuance agreement, guarantee commitment, and guarantee issuance commitment letter must be signed by the legally authorized representative of the credit institution or FBB, in compliance with applicable laws and the internal regulations of the credit institution or FBB.
2. The use of electronic signatures and the authorization to sign guarantee issuance agreements, guarantee commitments, and guarantee issuance commitment letters shall be carried out in accordance with relevant legal regulations.
Article 18. Security for the fulfillment of customer obligations
1. The credit institution or FBB shall agree with the customer and other relevant parties (if any) on whether or not to apply security measures when executing the guarantee transaction.
2. The credit institution or FBB shall establish specific principles and requirements for cases where no security measure is applied. In cases where security measures are agreed upon, the parties shall comply with applicable laws on security for obligations and the internal regulations of the credit institution or FBB.
Article 19. Guarantee fees
1. The credit institution or FBB shall agree on the guarantee fee level with the customer and other relevant parties (if any) and must publicly disclose the guarantee fee schedule.
2. In the case of co-guarantees, the parties involved in the co-guarantee shall agree on the guarantee fee for each guarantor.
3. In the case where the credit institution or FBB guarantees a joint obligation, the credit institution or FBB shall agree with each customer on the payable guarantee fee based on the respective joint obligation of each customer, unless otherwise agreed by the parties.
4. If the guarantee currency is a foreign currency, the parties may agree to collect the guarantee fee in that foreign currency or convert it into Vietnamese dong based on the selling exchange rate of the guarantor at the time of fee collection or at the time of fee notification.
5. The parties may agree to adjust the guarantee fee level.
Article 20. Validity period of the guarantee commitment and the guarantee issuance agreement
1. The validity period of the guarantee commitment shall be determined from the time of issuance of the guarantee commitment or after its issuance, as agreed upon by the relevant parties, until the termination of the guarantee obligation as specified in Article 23 of this Circular. The validity period of the guarantee letter in off-plan housing guarantees shall comply with the provisions of Clause 5, Article 13 of this Circular.
2. The validity period of the guarantee issuance agreement shall be agreed upon by the parties but must be at least equal to the validity period of the guarantee commitment. The validity period of the guarantee issuance agreement in off-plan housing guarantees shall comply with the provisions of Clause 3, Article 13 of this Circular.
3. If the expiry date of the guarantee commitment or guarantee issuance agreement falls on a weekend, public holiday, or Tet holiday, the expiry date shall be extended to the next working day.
4. The extension of the validity period of the guarantee commitment or the guarantee issuance agreement shall be subject to agreement among the parties in compliance with relevant laws.
Article 21. Exemption from guarantee obligation
1. In cases where the obligee exempts the guarantor or the guarantee-confirming party from performing the guarantee obligation, the obligor shall still be required to fulfill its committed obligation to the obligee, unless otherwise agreed by the parties or in cases of joint liability as prescribed by law.
2. In cases where one or several co-guarantors are exempted from performing their portion of the guarantee obligation under the agreement of the relevant parties, the remaining co-guarantors shall still be required to fulfill their respective portions of the guarantee obligation as per the guarantee commitment, unless otherwise agreed by the parties.
Article 22. Performance of guarantee obligation
1. To request the performance of the guarantee obligation, the obligee must submit a request dossier for the performance of the guarantee obligation as prescribed in point i, clause 1, article 16 of this Circular to the guarantor. The guarantor shall verify the submitted request dossier and compare it with the terms and conditions stipulated in the guarantee commitment. If the request dossier for the performance of the guarantee obligation is valid, the guarantor shall perform the guarantee obligation in accordance with clause 3 of this Article. If the request dossier is invalid, the guarantor shall refuse to perform the guarantee obligation as prescribed in clause 4 of this Article.
2. The request dossier for the performance of the guarantee obligation is deemed valid when:
a) The guarantor receives the complete request dossier within the validity period of the guarantee commitment, specifically:
(i) If sent directly in writing, it must be within the guarantor’s working hours;
(ii) If sent via registered mail through postal services, the date of receipt shall be the date the guarantor signs for the registered mail;
(iii) If sent via electronic means, the date of receipt shall be determined according to the time the guarantor receives the data message as prescribed by the law on electronic transactions;
b) The dossier fully meets the conditions for the performance of the guarantee obligation as stipulated in the guarantee commitment.
3. Performance of the guarantee obligation:
a) In the case of a bank guarantee (excluding counter-guarantee and guarantee confirmation):
Within 5 working days from the date the guarantor receives a valid request dossier for the performance of the guarantee obligation as stipulated in clause 2 of this Article, the guarantor shall fully and properly perform the guarantee obligation committed to the obligee. Simultaneously, the guarantor shall record the amount paid on behalf of the obligor as a compulsory loan in the loan account and notify the customer accordingly. The customer shall be required to fully repay the amount paid by the guarantor along with interest as prescribed in clause 5 of this Article;
b) In the case of counter-guarantee:
Within 5 working days from the date the guarantor receives a valid request dossier for the performance of the guarantee obligation as prescribed in clause 2 of this Article, the guarantor shall request the counter-guarantor to make the payment on behalf of the obligor.
The counter-guarantor shall fully and properly perform the counter-guarantee obligation committed to the guarantor, simultaneously recording the amount paid on behalf of the obligor as a compulsory loan in the loan account and notifying the customer accordingly. The customer shall be required to fully repay the amount paid by the counter-guarantor along with interest as prescribed in clause 5 of this Article.
If the counter-guarantor fails to perform or does not fully perform the obligation committed to the guarantor, the guarantor shall fully and properly perform the guarantee obligation committed to the obligee. Simultaneously, the guarantor shall record the amount paid on behalf of the counter-guarantor as a compulsory loan in the loan account and notify the counter-guarantor. The counter-guarantor shall be responsible for fully repaying the amount paid by the guarantor along with interest as prescribed in clause 5 of this Article;
c) In the case of guarantee confirmation:
Within 5 working days from the date the guarantor receives a valid request dossier for the performance of the guarantee obligation as prescribed in clause 2 of this Article, the guarantor shall fully and properly perform the guarantee obligation committed to the obligee. Simultaneously, the guarantor shall record the amount paid on behalf of the obligor as a compulsory loan in the loan account and notify the customer accordingly. The customer shall be required to fully repay the amount paid by the guarantor along with interest as prescribed in clause 5 of this Article.
If the guarantor fails to perform or does not fully perform the guarantee obligation committed to the obligee, the obligee shall submit a request dossier for the performance of the guarantee obligation to the guarantee-confirming party, as stipulated in the guarantee commitment. Within 5 working days from the date the guarantee-confirming party receives a valid request dossier for the performance of the guarantee obligation as prescribed in clause 2 of this Article, the guarantee-confirming party shall fully and properly perform the obligation committed to the obligee. Simultaneously, the guarantee-confirming party shall record the amount paid on behalf of the guarantor as a compulsory loan in the loan account and notify the guarantor. The guarantor shall be responsible for fully repaying the amount paid by the guarantee-confirming party along with interest as prescribed in clause 5 of this Article, while requiring the customer to assume compulsory debt and repay the guarantor.
4. In cases of refusal to perform the guarantee obligation, within 5 working days from the date of receiving the request for the performance of the guarantee obligation, the refusing party must issue a written response clearly stating the reason for the refusal.
5. The paying party (the guarantor, counter-guarantor, or guarantee-confirming party) shall apply an interest rate on the amount paid, in accordance with the guarantee issuance agreement, but not exceeding the highest overdue lending interest rate applied at the respective credit institution or FBB.
6. In cases of payment in foreign currency, the paying party shall record the compulsory loan in the same foreign currency paid, and the customer shall repay the debt in the same foreign currency or convert it into Vietnamese dong or another foreign currency at the agreed exchange rate. If the payment is made in Vietnamese dong, the paying party shall record the compulsory loan in Vietnamese dong.
Article 23. Termination of guarantee obligations
The guarantee obligation shall be terminated in the following cases:
1. The obligor’s obligation is discharged.
2. The guarantee obligation has been fully performed in accordance with the guarantee commitment.
3. The guarantee is canceled or replaced by another security measure as agreed upon by the obligee, the guarantor, and other relevant parties (if any).
4. The guarantee commitment has expired.
5. The obligee grants a release from the guarantee obligation to the guarantor.
6. As agreed upon by the parties.
7. The guarantee obligation is terminated in other cases as prescribed by law.
Article 24. Co-guarantee
1. The principles, conditions, and procedures for implementing co-guarantees shall be carried out in accordance with this Circular, the regulations of the State Bank of Vietnam on syndicated credit granting by credit institutions and FBBs to customers, and other relevant legal provisions.
2. The parties participating in the co-guarantee shall be jointly liable for performing the guarantee obligation unless otherwise agreed or provided by law for separate guarantees. If the lead credit institution or FBB is required to fulfill the guarantee obligation, the participating parties shall be responsible for reimbursing the lead credit institution or FBB for the corresponding amount according to the agreed co-guarantee participation ratio.
Article 25. Guarantee for a joint and several obligation
A credit institution or FBB providing a guarantee for a joint and several obligation must do so based on a contract establishing joint and several rights and obligations among the parties.
Article 26. Internal regulations of credit institutions and FBBs on guarantees
1. Based on the provisions of this Circular and relevant laws, credit institutions and FBBs shall issue internal regulations on guarantee operations for customers (including provisions on electronic guarantees, if applicable; guarantees for off-plan housing, if applicable; and guarantees for non-resident customers). These internal regulations must comply with credit granting regulations and clearly define the responsibilities between the appraisal and approval stages of guarantee issuance.
2. Credit institutions and FBBs shall submit their internal regulations on bank guarantee operations to the State Bank of Vietnam and the provincial branches of the State Bank in accordance with relevant legal provisions.
Article 27. Rights of the guarantor
1. Accept or reject a guarantee request.
2. Request a guarantee-confirming party to confirm the guarantee for its guarantee to the obligor.
3. Require the customer and related parties to provide relevant information and documents for guarantee assessment and secured assets (if applicable).
4. Require the customer to establish security measures for the guaranteed obligation (if necessary).
5. Inspect and monitor the financial status of the customer during the validity period of the guarantee.
6. Collect and adjust guarantee fees; apply and adjust interest rates and penalty interest rates.
7. Refuse to perform the guarantee obligation if the demand for guarantee payment is invalid or if there is evidence proving that the submitted documents are falsified.
8. Require the counter-guarantor to fulfill its committed obligations.
9. Record mandatory debit entries against the customer's account for the amount paid on behalf of the obligor immediately upon fulfilling the guarantee obligation; require the customer to reimburse the amount paid by the guarantor as per the agreement.
10. Require other co-guarantors to reimburse the amount paid on behalf of the obligor in proportion to their agreed participation in the co-guarantee arrangement if the lead co-guarantor fulfills the guarantee obligation.
11. Handle secured assets in accordance with the agreement and legal regulations.
12. Transfer its rights and obligations to another credit institution or FBB as agreed by the related parties, in compliance with legal provisions.
13. Initiate legal proceedings in accordance with the law when the customer breaches its contractual obligations.
14. Exercise other rights as agreed by the parties, in compliance with legal regulations.
Article 28. Rights of the counter-guarantor
1. Accept or refuse the request for the issuance of a counter-guarantee.
2. Request the guarantor to issue a guarantee for the obligation of its customer to the obligee.
3. Require the customer to provide documents and information related to the appraisal of the counter-guarantee and collateral (if any).
4. Require the customer to implement security measures for the guarantee obligation (if necessary).
5. Inspect and monitor the financial status of the customer during the validity period of the guarantee.
6. Collect and adjust guarantee fees; apply and adjust interest rates and penalty interest rates.
7. Refuse to perform the counter-guarantee obligation if the demand for guarantee payment is invalid or if there is evidence proving that the submitted documents are falsified.
8. Record mandatory debit entries against the customer's account for the amount paid on behalf of the customer immediately upon fulfilling the counter-guarantee obligation to the guarantor, and require the customer to reimburse the amount paid by the counter-guarantor to the guarantor as per the agreement.
9. Handle the customer's secured assets in accordance with the agreement and legal regulations.
10. Initiate legal proceedings in accordance with the law if the customer or the guarantor breaches its contractual obligations.
11. Transfer its rights and obligations to another credit institution or FBB as agreed by the related parties, in compliance with legal provisions.
12. Exercise other rights as agreed by the parties, in compliance with legal regulations.
Article 29. Rights of the guarantee-confirming party
1. Accept or refuse the request for guarantee confirmation.
2. Require the customer to provide information and documents related to the appraisal of the guarantee and collateral (if any).
3. Require the customer to implement security measures for the guarantee obligation (if necessary).
4. Collect and adjust guarantee fees; apply and adjust interest rates and penalty interest rates.
5. Inspect and monitor the financial status of the customer during the validity period of the guarantee.
6. Record mandatory debit entries against the guarantor's account for the amount paid on behalf of the guarantor immediately upon fulfilling the guarantee confirmation obligation and require the guarantor to reimburse the amount paid by the guarantee-confirming party as per the agreement.
7. Handle secured assets of the guarantor or the obligor in accordance with the agreement and legal regulations.
8. Initiate legal proceedings in accordance with the law if the guarantor breaches its contractual obligations.
9. Transfer its rights and obligations to another credit institution or FBB as agreed by the related parties, in compliance with legal provisions.
10. Refuse to perform the guarantee obligation if the demand for guarantee payment is invalid or if there is evidence proving that the submitted documents are falsified.
11. Exercise other rights as agreed by the parties, in compliance with legal regulations.
Article 30. Obligations of the guarantor, counter-guarantor, and guarantee-confirming party
1. Provide relevant information and documents concerning the authority to issue the guarantee commitment to the related parties; fulfill the guarantee obligation upon receiving a request in accordance with the provisions of the guarantee commitment.
2. Fully and properly perform the guarantee obligations stipulated in Article 22 of this Circular.
3. Inspect and monitor the financial condition of the customer during the validity period of the guarantee issuance agreement.
4. Fully return the secured assets (if any) and related documents to the security provider upon the liquidation of the guarantee issuance agreement, unless otherwise agreed.
5. Within 5 working days from the date of receipt of a written complaint from the obligee regarding the reason for refusal to fulfill the guarantee obligation, issue a written response to the complainant.
6. Maintain guarantee records in accordance with legal regulations.
7. Guide the obligee on how to verify and authenticate the validity of the issued guarantee commitment.
8. Fulfill other obligations as agreed by the parties in compliance with legal regulations.
Article 31. Rights and obligations of the customer
1. The customer has the following rights:
a) Refuse any request from the guarantor/counter-guarantor/guarantee-confirming party that is inconsistent with the terms of the guarantee issuance agreement or guarantee commitment;
b) Request the guarantor/counter-guarantor/guarantee-confirming party to fulfill their obligations and responsibilities in accordance with the commitment;
c) Initiate legal proceedings under applicable laws if the guarantor/counter-guarantor/guarantee-confirming party breaches their committed obligations;
d) Assign their rights and obligations in accordance with the agreement between the related parties and in compliance with legal regulations. Exercise their rights and obligations under legal provisions when related parties carry out the assignment of guarantee rights and obligations;
dd) Verify the authenticity of the guarantee commitment;
e) Exercise other rights as agreed upon by the parties in compliance with legal regulations.
2. The customer has the following obligations:
a) Provide complete, accurate, and truthful information and documents related to the guarantee and be legally responsible for their accuracy, truthfulness, and completeness;
b) Fully and punctually fulfill the obligations and responsibilities committed to in the guarantee issuance agreement;
c) Reimburse the guarantor/counter-guarantor/guarantee-confirming party for the amount they have paid in fulfilling the guarantee obligation, in accordance with the guarantee issuance agreement or commitments between the parties, along with any associated costs arising from the guarantee fulfillment;
d) Be subject to inspections and supervision by the guarantor/counter-guarantor/guarantee-confirming party regarding the implementation of the guaranteed obligation. The customer must report relevant business activities related to the guarantee transaction to the guarantor/counter-guarantor/guarantee-confirming party;
dd) Cooperate with the guarantor/counter-guarantor/guarantee-confirming party and other related parties in the handling of secured assets (if applicable);
e) Fulfill other obligations as agreed upon by the parties in compliance with legal regulations.
Article 32. Rights and obligations of the obligee
1. Rights of the obligee:
a) Request the guarantor and the guarantee-confirming party to fulfill their obligations and responsibilities as stated in the guarantee commitment;
b) File a complaint against the guarantor and the guarantee-confirming party within 5 working days from the date of receiving the refusal notice from the guarantor or the guarantee-confirming party if the reasons for refusal to fulfill the guarantee obligation are inconsistent with the guarantee commitment conditions;
c) Initiate legal proceedings under applicable laws if the guarantor or the guarantee-confirming party breaches their committed obligations;
d) Verify the authenticity of the guarantee commitment;
dd) Assign their rights and obligations to other organizations or individuals in accordance with the agreement between the related parties and in compliance with legal regulations;
e) Waive the guarantee obligation for the guarantor and the guarantee-confirming party;
g) Exercise other rights as agreed upon by the parties in compliance with legal regulations.
2. Obligations of the obligee:
a) Fully and properly fulfill the obligations under contracts related to the guaranteed obligation; comply with all obligations stipulated in the guarantee commitment (if applicable);
b) Promptly notify the guarantor, the guarantee-confirming party, and relevant parties of any violations or breaches committed by the obligor;
c) Be legally responsible for the accuracy, completeness, validity, and legality of the documents and materials submitted under the guarantee commitment and for the declarations made in the obligee’s request for guarantee fulfillment;
d) Fulfill other obligations as agreed upon by the parties in compliance with legal regulations.
Chapter III
REPORTING AND IMPLEMENTATION
Article 33. Accounting and reporting
1. Credit institutions and FBBs must perform accounting and track all guarantee transactions arising in accordance with regulations.
2. Credit institutions and FBBs must report on the implementation of guarantees in accordance with the statistical reporting regime of the State Bank of Vietnam.
Article 34. Transitional provisions
Guarantee issuance agreements and guarantee commitments that were signed and became effective before the effective date of this Circular shall continue to be implemented in accordance with the agreements and commitments, provided that they comply with the legal regulations in effect at the time of signing until the guarantee obligation is terminated. Any amendments or supplements to such guarantee issuance agreements and guarantee commitments shall only be made if the revised or supplemented content complies with the provisions of this Circular.
Article 35. Entry into force
1. This Circular comes into force as of April 1, 2025.
2. This Circular supersedes Circular No. 11/2022/TT-NHNN dated September 30, 2022 of the Governor of the State Bank of Vietnam on bank guarantees and Circular No. 49/2024/TT-NHNN dated October 25, 2024 of the Governor of the State Bank of Vietnam on amendments to certain provisions of Circular No. 11/2022/TT-NHNN dated September 30, 2022, on bank guarantees.
Article 36. Implementation
1. The Department of Credit for Economic Sectors shall be responsible for monitoring, consolidating, and inspecting the implementation of the guarantee operations of credit institutions and FBBs and shall act as the focal point for addressing issues arising in relation to guarantee operations.
2. The heads of units under the State Bank of Vietnam, credit institutions, and FBBs shall be responsible for implementing this Circular.
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