Agreement on Credit Limits for Commercial Banks
关于商业银行授信限额的协议
ຂໍ້ຕົກລົງ ວ່າດ້ວຍ ຂອບເຂດການໃຫ້ສິນເຊື່ອຂອງທະນາຄານທຸລະກິດ
Summary
This Agreement, issued by the Governor of the Bank of the Lao PDR, prescribes limits, exceptions, collateral, and responsibilities for credit provided by commercial banks to individuals, groups of individuals, large customers, and interbank lending, to ensure the sound operation of commercial banks.
Articles
Article 1
Purpose. To ensure the soundness of commercial banks, by prescribing limits on credit extended to any individual or group of individuals, aiming to diversify credit to reduce risk, ensure the quality of credit extension, and fully meet the credit needs of all parties.
Article 2
Definitions.
2.1 "Capital" means the Tier 1 capital of a commercial bank, calculated in accordance with the standards set forth in Agreement No. 135/BOL, dated March 20, 2007.
2.2 "Person" means any natural person or legal entity.
2.3 "Group of persons" means a group of two or more persons who are deemed to be the same person under the following circumstances:
— Any person directly or indirectly holds control over others within the group and holds more than 20% of the total voting shares;
— The aforementioned persons are within the same group, and there exists a relationship within the group through common ownership, shared management, mutual guarantees, or similar connections.
2.4 "Large customer" means a person or group of persons to whom a bank provides credit amounting to 10% or more of its capital.
2.5 "Credit" means loans or banking debt obligations provided by a bank to a customer.
2.6 "Loan" means funds provided by a bank to any person or group of persons, recorded both on and off the balance sheet, such as: ordinary loans (Loan), overdrafts (OD), customer advances (Advances), and syndicated loans (Syndicated Loan) with other banks.
2.7 "Banking debt obligation" means an obligation undertaken by a bank in a contract to provide future services to a customer, recorded off the balance sheet, such as: letters of credit (LC), guarantees (BG, LG), acceptances (Acceptance, Avalisation, and similar commitment documents), and others.
Article 3
Limits on credit provision to individuals, groups of individuals, and major customers. Commercial banks supervised by the Bank of the Lao PDR may provide credit to their customers in accordance with the following provisions:
3.1 The total of any one or more types of credit provided to any single individual shall not exceed 25% of capital.
3.2 The total of any one or more types of credit provided to any single group of individuals shall not exceed 50% of capital.
3.3 For the credit referred to in Articles 3.1 and 3.2, in cases where multiple credit facilities exist, the total of newly approved facilities plus the remaining balance of existing facilities shall be calculated.
3.4 For credit exceeding the limits in Articles 3.1 and 3.2, commercial banks must jointly provide such credit with other commercial banks or financial institutions and must report to the Bank of the Lao PDR.
3.5 The total of various types of credit provided to major customers shall not exceed 8 times capital, i.e., 800%.
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