Borrowers of money sourced from the Government's foreign debt will be charged a late fee equal to 150 percent of the interest due on their loans from Monday, August 1.
The present penalty is 130 per cent of the prevailing interest rate.
The decision to tighten the criteria for loans to financial institutions and provincial People's Committees is embodied in Decree No78/2010/ND-CP which was signed on July 14.
The purpose of the decree is to promote effective spending.
"I think the higher late-payment-fee is to remind borrowers of the need to improve the profitability of each borrowed penny," Central Institute for Economic Management dep-uty director Vo Tri Thanh told the English – language daily Vietnam News.
A member of another Hanoi-based economic think-tank, who asked to remain anonymous said the decision seemed essential after spending violations such as those by the Vinashin Business Group.
The new decree regulates three types of fees which, unlike previously, are based on the type of borrowings rather than the value of the loans.
Borrowers from Overseas Development Assistance loans will have to pay a fee equal to 0.2 percent of the debt balance; the fee for commercial and preferred borrowers will total 0.25 per cent of the debt balance.
The fee will not apply to provincial people's committees.
Foreign lending parties will have responsibility for the collection of the second type of fee - the management; commitment; capital withdrawal; insurance and any other fees stipulated in the foreign loan.
The third type of fee - borrower payment of fees to intermediary banks, will remain subject to the latter's regulations./.
The present penalty is 130 per cent of the prevailing interest rate.
The decision to tighten the criteria for loans to financial institutions and provincial People's Committees is embodied in Decree No78/2010/ND-CP which was signed on July 14.
The purpose of the decree is to promote effective spending.
"I think the higher late-payment-fee is to remind borrowers of the need to improve the profitability of each borrowed penny," Central Institute for Economic Management dep-uty director Vo Tri Thanh told the English – language daily Vietnam News.
A member of another Hanoi-based economic think-tank, who asked to remain anonymous said the decision seemed essential after spending violations such as those by the Vinashin Business Group.
The new decree regulates three types of fees which, unlike previously, are based on the type of borrowings rather than the value of the loans.
Borrowers from Overseas Development Assistance loans will have to pay a fee equal to 0.2 percent of the debt balance; the fee for commercial and preferred borrowers will total 0.25 per cent of the debt balance.
The fee will not apply to provincial people's committees.
Foreign lending parties will have responsibility for the collection of the second type of fee - the management; commitment; capital withdrawal; insurance and any other fees stipulated in the foreign loan.
The third type of fee - borrower payment of fees to intermediary banks, will remain subject to the latter's regulations./.
