NEW REGULATIONS ON BANKING GUARANTEES FOR HOME PURCHASES

The State Bank of Viet Nam has issued a circular to amend Circular No 07/2015 on bank guarantees. Under the Circular No 13/2017, which will take effect on November 15, commercial banks must issue guarantees for buyers of future property within 10 days from the date the real estate purchase contract is signed.

The guarantee means that banks would implement financial obligations to the buyers on behalf of the housing developers in case they fail to hand over the property before the committed deadline without adequately refunding the advances.

The maximum guaranteed amount would be equal to the amount the developers are allowed to receive in advance from the buyers.

Banks eligible to provide a guarantee for home purchases must meet two requirements. Firstly, their establishment and operation licences should have regulations on guarantees and secondly, banks are not banned from providing guarantees in the period of being under special control.

The central bank will announce eligible banks for providing guarantees for future home purchases on its website. Banks that are removed from the list must still continue to implement its guarantees until the validity of the agreements.

The central bank on Tuesday announced that two more banks, Woori Viet Nam and CIMB Viet Nam, are eligible to provide a guarantee for home purchases.

More than 30 banks in Viet Nam are now eligible to provide guarantees for future home purchases.

Source: VIR