Circular No. 17/2022/TT-NHNN dated December 23rd, 2022 of the State Bank on providing guidelines on environmental risk management in credit extension by credit institutions and foreign bank branches

This Circular provides for environmental risk identification, assessment and management in credit extension in respect of investment projects.

Accordingly, banks have to conduct environmental risk assessment in extending credit to investment projects as regulated at Appendixes III, IV, V enclosed with Decree No. 08/2022/ND-CP.

“Environmental risk” means the probability of causing adverse impacts on the environment during the implementation of an investment project resulting in increased costs, reduced incomes or loss of capital and/or assets of the client that is the project owner.

If an investment project is found to have environmental risks, the bank shall reach an agreement with its client on addition of measures to be taken by the client to minimize the environmental risks in extending credit to the credit extension agreement.

Each bank shall formulate its own internal regulations on environmental risk management in extending credit, at least including the contents regulated at clause 2 Article 6 of this Circular.

This Circular takes effect from June 1st, 2023.