Headlines 16/10/2017 15:59 CH

New interest calculator: The assumption of 360-day year no longer valid

Thành Đạt

This is the highlight of the Circular No. 14/2017/TT-NHNN dealing with the method for calculation of interest on deposit acceptance and credit extension transactions between credit institutions and customers.

Pursuant to this Circular, the standardized number of days in a year for a transition from the percentage of interest per day to the percentage of interest per year or vice versa will be 365 days (as against 360 days prescribed in the Decision No. 652/2001/QD-NHNN currently in effect).

The new interest calculator is elaborated as follows:

The day-based interest sum = (Actual balance x Predetermined interest rate)/365

The interest sum for the entire term equals the aggregate of interest accruing over days of the term

As for deposit acceptance or credit agreements in which the allowable period for maintaining the actual balance within the term is more than 01 day, the following calculation method will be applied:

The interest sum = ∑(Actual balance x days of maintenance of actual balance x Predetermined interest rate)/365.

Additionally, this Circular will allow credit institutions to agree with their customers on utilization of either of methods for determination of the number of days and the date of determination of the balance for interest calculation.

For more details, please read the Circular No. 14/2017/TT-NHNN which is set to enter into force on January 1, 2018.

>> CLICK HERE TO READ THE ARTICLE IN VIETNAMESE

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