On October 25, 2024, the State Bank of Vietnam (SBV) issued Circular No. 49/2024/TT-NHNN (“Circular 49”) amending and supplementing certain provisions of Circular No. 11/2022/TT-NHNN dated September 30, 2022, on bank guarantees (“Circular 11”). However, shortly thereafter, the SBV replaced both Circular 11 and Circular 49 with Circular No. 61/2024/TT-NHNN (“Circular 61”) dated December 31, 2024, which incorporates most of the updates from Circular 49 while introducing further amendments to bank guarantee regulations to align with the 2024 Law on Credit Institutions and 2023 Law on Real Estate Business. Circular 61 has an effective date of April 1, 2025.
Below, we highlight some new regulations on bank guarantees under Circular 61, including those that were adopted from Circular 49.
Updated Definitions
Circular 61 broadens the definition of “customer” in bank guarantee relationships, introducing the possibility of a fourth party. Traditionally, a customer would request a credit institution to guarantee its obligations. Under the revised framework, a customer may also request the credit institution to issue a guarantee for another party, such as a parent company requesting a guarantee for its subsidiary. This change establishes a broader scope of parties involved in a bank guarantee relationship, which now includes the customer, the guarantor, the guaranteed party, and the beneficiary.
Circular 61 also updates the definitions of “bank guarantee”, “cross-guarantee”, and “guaranteed party” to align with the term “bank guarantee” as defined in the 2024 Law on Credit Institutions. This includes requirements on mandatory debt acknowledgement.
Bank Guarantees for Sale of Off-Plan Housing
Circular 61, in alignment with Circular 49, the Law on Credit Institutions, and the Law on Real Estate Business, allows foreign bank branches and commercial banks (the “Guarantor”) to guarantee off-plan housing with a detailed procedure.
The guarantee agreement between the Guarantor and the real estate project investor will be effective from the time of signing until the guarantee obligations for all guarantee letters issued to the home purchasers are terminated in accordance with applicable law (e.g., when the real estate project investor fulfills its commitment to hand over the property as stipulated in the off-plan housing purchase/rent-to-own contract), and all obligations of the real estate project investor to the Guarantor under the guarantee agreement have been fully satisfied, unless the parties mutually agree to terminate the guarantee agreement prior to its expiration.
Guarantee agreements that were signed and became effective prior to the effective date of Circular 61 (April 1, 2025) will remain in effect and continue to be implemented in accordance with the terms of the agreements, provided they comply with the applicable legal regulations in force at the time of signing, until the guarantee obligation is fulfilled. However, any amendments or additions to these agreements may only be made if the revised or supplementary content complies with the provisions of Circular 61.
Electronic Guarantee Activities
Circular 61 amends and supplements the minimum requirements for credit institutions and foreign bank branches when developing measures, forms, and technologies to implement electronic guarantee operations. These requirements include, among others, applying appropriate electronic transaction confirmation methods for customers when conducting electronic transactions during the electronic guarantee process; ensuring proper storage and preservation of documents, information, and customer identification data throughout the electronic guarantee process; and clearly defining the specific roles and responsibilities of individuals and departments involved in building, setting up, and operating the information system for credit assessment and decision-making in the electronic guarantee process.
Other New Points
Credit institutions and foreign bank branches are allowed to agree with related parties to use a foreign language for guarantee transactions conducted through the SWIFT system.
Credit institutions and foreign bank branches are required to publicly disclose their guarantee fees.
A foreign bank branch is prohibited from issuing a guarantee in foreign currency for a non-resident institutional client unless the beneficiary is a resident.
