Borrowers of money sourced from the Government's foreign debt will becharged a late fee equal to 150 percent of the interest due on theirloans 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 financialinstitutions and provincial People's Committees is embodied in DecreeNo78/2010/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 needto improve the profitability of each borrowed penny," Central Institutefor Economic Management dep-uty director Vo Tri Thanh told theEnglish – language daily Vietnam News.
A member of anotherHanoi-based economic think-tank, who asked to remain anonymous said thedecision seemed essential after spending violations such as those bythe Vinashin Business Group.
The new decree regulatesthree types of fees which, unlike previously, are based on the type ofborrowings rather than the value of the loans.
Borrowersfrom Overseas Development Assistance loans will have to pay a fee equalto 0.2 percent of the debt balance; the fee for commercial and preferredborrowers 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 ofthe 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 financialinstitutions and provincial People's Committees is embodied in DecreeNo78/2010/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 needto improve the profitability of each borrowed penny," Central Institutefor Economic Management dep-uty director Vo Tri Thanh told theEnglish – language daily Vietnam News.
A member of anotherHanoi-based economic think-tank, who asked to remain anonymous said thedecision seemed essential after spending violations such as those bythe Vinashin Business Group.
The new decree regulatesthree types of fees which, unlike previously, are based on the type ofborrowings rather than the value of the loans.
Borrowersfrom Overseas Development Assistance loans will have to pay a fee equalto 0.2 percent of the debt balance; the fee for commercial and preferredborrowers 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 ofthe 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./.
