Chapter I
GENERAL PROVISIONS
Article 1. Scope and regulated entities
1. This Circular provides guidance on treatment of risks arising from direct lending operations of NATIF as prescribed in the Charter of organization and operation of NATIF issued together with Decision No. 04/2021/QD-TTg dated January 29, 2021 of the Prime Minister (hereinafter referred to as NATIF’s Charter).
2. This Circular applies to the NATIF, enterprises engaging in the direct lending operations of NATIF (hereinafter referred to as enterprises), and relevant organizations and individuals.
Article 2. Definitions
For the purpose of this Circular, the terms below shall be construed as follows:
1. “risk treatment” means the adoption of the measures specified in clause 2 Article 31 of NATIF’s Charter.
2. “revision of payment periods/amounts” means NATIF and an enterprise agree on changes in periods for making payment of debts (principal and/or interest) or payment amounts (principal and/or interest) agreed upon in the signed contract while the loan term does not change.
3. “extension of repayment period” means the agreement made between NATIF and an enterprise on extension of the repayment period of debts (principal and/or interest) specified in the signed contract.
4. “debt charge-off” means the agreement made between NATIF and an enterprise whereby a portion or all of the enterprise’s debt (principal and/or interest) will not be collected within a given period under the signed contract.
5. “debt sale” means NATIF's transfer of a part or all of the rights to collect debt and other rights associated with the enterprise’s debt to a debt buyer and receipt of payment from the debt buyer.
6. “disposition of collateral” means NATIF’s adoption of measures for disposing of the collateral provided by the enterprise to recover debt (principal and/or interest).
7. “transfer to off-balance sheet” means that NATIF transfers the enterprise’s debt with resolved risks to off-balance sheet accounts for accounting and monitoring purposes, and take measures to fully recover debts as agreed upon by the enterprise with NATIF, but does not alter repayment obligations of the enterprise for the debt with resolved risks.
8. “outstanding interest write-off” means NATIF’s partial or total forgiveness of the outstanding interest owned by an enterprise under the signed contract.
9. “outstanding principal write-off” means NATIF’s partial, or total forgiveness of the outstanding principal owned by an enterprise under the signed contract.
10. “book value of debt" means total amount of outstanding principal and interest and any other financial liabilities associated with an enterprise’s debt, which is recorded in the accounting books of NATIF in accordance with regulations of law.
Article 3. Risk treatment principles
1. The treatment of risks must comply with regulations of law.
2. The risk treatment requires consideration of several factors, including the cause and degree of risk, the production and financial situation of the enterprise, and their creditworthiness, and having sufficient documentation as prescribed in this Circular and NATIF's Charter.
3. The risk treatment aims to minimize State damage and hold NATIF, enterprises, organizations, and individuals responsible for recovering loans.
4. Risk treatment measures are prioritized based on their impact on capital. Measures that cause no loss to little loss of state capital should be implemented first.
5. A debt may undergo one or more risk treatment measures outlined in this Circular.
6. NATIF's risk tolerance ratio at the end of the financial year is below 5% and complies with Clause 6, Article 4 of NATIF's Charter. In case NATIF's risk tolerance ratio is 5% or more, NATIF shall report to the Ministry of Science and Technology for handling according to Point d, Clause 4, Article 31 of NATIF’s Charter.
Article 4. Scope of handling risky debts
1. If a collateral used to secure a loan given by NATIF to the enterprise becomes risky, NATIF is entitled to actively dispose of the collateral as agreed with the enterprise and in accordance with regulations of law on capital recovery. The collateral proceeds will go towards covering disposal expenses and repaying NATIF's principal and interest.
2. If a collateral used to secure a loan given by NATIF under insurance cover is damaged, it will be handled according to the insurance contract. The insurance payout given by the insurer is used to repay the principal and interest to NATIF.
3. If an enterprise taking out a loan from NATIF goes bankrupt, applicable regulations of law shall prevail.
Article 5. Funding for risk treatment
1. Proceeds from debt sale and disposition of collateral.
2. Funding from the loan loss reserves and financial reserve fund:
a) The loan loss reserves, and financial reserve fund shall be used according to point a Clause 6 Article 31 and point b Clause 5 Article 40 of NATIF’s Charter for implementing the following risk treatment measures, including: debt sales (when the selling price is less than the book value of debt), collateral disposition (when the proceeds are less than the book value of debt), and outstanding principal write-offs;
b) If the loan loss reserves and financial reserve fund are insufficient to cover all risks and result in a decrease in NATIF’s charter capital, NATIF shall request the Ministry of Science and Technology to present the case to the Prime Minister for further consideration.
3. Funding for implementing other risk treatment measures shall comply with regulations of law.
Article 6. Risk treatment consideration cases
1. Enterprises suffer financial and/or property damage due to disasters in accordance with regulations of law on prevention and control of disasters, calamities, crop failure, epidemics, fire, war events or national state of emergency.
2. An enterprise that is at risk because its owner (for a sole proprietor or a one-member limited liability company) loses his/her active legal capacity, dies, disappears, or leaves no property to repay their debts; an enterprise that has ceased operations, and it lacks assets and financial resources to clear its debts; an enterprise that faces risks due to other objective causes including unforeseen accidents, political risks, changes in State policies that directly impact its production and business operations, resulting in financial losses, difficult financial circumstances, or default on debts (principal or interest).
3. An enterprise that encounters financial difficulties resulting in lack of financial resources to repay debts or default on debts other than the cases specified in Clauses 1 and 2 of this Article.
4. The enterprise has completed the bankruptcy process in accordance with current law.
Article 7. Determination of capital and asset damage
1. When an enterprise incurs risk, NATIF shall play the leading role and cooperate with relevant parties, including NATIF, the enterprise, and competent authorities (if any), to examine and assess the risk and make a record of capital and asset damage incurred by that enterprise.
2. The record of capital and asset damage incurred by the enterprise must bear certifications of related parties as specified in clause 1 of this Article and contain all the necessary information such as events, risks incurred, causes of risks, and the capital and asset damage level.
3. The level of capital and asset damage incurred by the enterprise is the cash value of assets and capital actually damaged or lost at the date of record.
4. NATIF is allowed to engage entities that are licensed to provide valuation services to determine the level of capital and asset damage incurred by the enterprise.
Article 8. Risk treatment council
1. NATIF Management Council shall establish a Risk Treatment Council. The Risk Treatment Council is composed of 1 President and 1 member of NATIF Management Council; 1 Vice President is NATIF's Director, or the person authorized by NATIF's Director; 3 other council members decided by NATIF Management Council.
2. The Risk Treatment Council shall review appraisal results, risk assessment results, reports on capital and property losses incurred by the enterprise, risk treatment reports and relevant information; and also give opinions on the measures specified in Articles 10, 11, 12, 13, 14, 15, 16 of this Circular to be applied in accordance with the requirements of debt risk treatment.
3. The operational funding of the Risk Treatment Council shall be set aside from NATIF's operational funding.
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Thông tư 03/2023/TT-BKHCN (Bản Pdf)
Thông tư 03/2023/TT-BKHCN (Bản Word)