Several content of regulation on operation of lending, borrowing; sale, purchase of valuable papers with term among credit institutions, branches of foreign banks prescribed in Circular No. 21/2012/TT_NHNN ("Circular 21") has been amended and supplemented by the most recent Circular No. 18/2016/TT-NHNN ("Circular 18"). Accordingly, the remarkable changes provided in Circular 18 are:

- Adding "bank of state policies" into the subject of application;

- Interest rate applicable to over due principal balance will be agreed by credit institutions or branch of foreign banks in the loan agreements, but not exceed 150% of in-term interest rate applicable to the loan;

- The rate applicable to late payment interest will be agreed by credit institutions or branches of foreign banks in the loan agreements, but not exceed 10% per annum.

- Clarifying the exceptions where credit institutions, branches of foreign banks are allowed to perform the deposit operation and receipt of deposit (excluding payment deposits and transactions of deposit and receipt of deposit with the maximum term of 03 months) at other credit institutions, branches of foreign banks, which are:

Upon deposit intake transactions, credit institutions and foreign banks’ branches must not incur debts overdue 10 days or more to other credit institutions or foreign banks’ branches, except:

(i) Credit institutions under special control, which are permitted to perform the transactions according to the approved plan for consolidating their organization and activities;

(ii) Credit institutions under restructuring, which are permitted to perform the transactions according to the plan for restructuring the organization and operation of credit institutions or foreign banks’ branches, as approved by the State Bank (if applicable).

Circular No. 18 takes effect from 22 August 2016.