Circular No. 16/2021/TT-NHNN dated November 10th, 2021 of the State Bank on corporate bond trading of credit institutions and branches of foreign banks

One of the new points of this Circular is that banks are only allowed to purchase corporate bonds when their non-performing loan ratio (in the latest classification) is less than 3%.

This Circular also specifies that banks are only allowed to purchase the corporate bond that is issued in VND, has not reached maturity which requires payment of both principal and interest, not under forward contract or discount contract or rediscount contract.

In addition, this Circular also prohibits banks to purchase corporate bonds issued to restructure debts, to contribute capital and/or purchase share, to increase working capital.

This Circular takes effect from January 15th, 2022.

To replace Circular No. 22/2016/TT-NHNN dated June 30th, 2016 and Circular No. 15/2018/TT-NHNN dated June 18th, 2018.