The methods of calculating interest incurred from depositing and credit extension between credit institutions, branches of foreign banks and customers
14:01 04/12/2017
The Governor of the State bank of Vietnam promulgates Circular No. 14/2017/TT-NHNN on methods of calculating interest on depositing and credit extension transaction between credit institutions and customers.
Interest rate is expressed by % per year (annual interest rate), a year means 365 days.
The period of time used to convert interest rate by % per month, % per week, % per hour into interest rate by % per day, convert interest rate by % per day into interest rate by % per year and vice verse is calculated as follows:
a) A year means 365 days;
b) A month means 30 days;
c) A week means 7 days;
d) A day means 24 hours.
Regarding deposits or loans with a term of one day or more:
The credit institution may negotiate with the client on the interest duration and the date of determination of the balance for the calculation of interest by employing either of the following 2 methods:
a) The interest duration is determined from the day following the day of disbursement of the loan or the day following the day of receipt of the deposit until the end of the last day of full payment for the deposit and loan (deleting the first day, including the last day of the interest duration) and the time to determine the balance for interest calculation is at the beginning of any day within the interest duration.
b) The interest duration is determined from the day following the date of disbursement of the credit extension or the day following the date of receipt of the deposit until the end of the day immediately preceding the date of full payment for the deposit and credit extension (including the first day, omitting the last day of the interest duration) and the time to determine the balance for interest calculation is at the end of any day within the interest duration.
Regarding deposits or loans that the time limit from the receipt of deposits or the time of disbursement of loans until the full payment of deposits or credit extensions of them is less than one day: the credit institution shall negotiate with the client on the interest duration which is from the time of receipt of the deposits or the time of disbursement of the loan to the time of full payment for such deposit or loan but not exceed a day.
The credit institution and the client may negotiate on the interest rate and interest calculation method in accordance with the law on receipt of deposits, credit extensions and this Circular.