Wednesday,  Oct 24, 2018,04:28 (GMT+7) 0 0
Banks urged to settle bad debts
The Saigon Times Daily
Sunday,  Jan 28, 2018,21:05 (GMT+7)

Banks urged to settle bad debts

The Saigon Times Daily

HCMC – The State Bank of Vietnam (SBV) has told commercial banks to adopt measures in line with the National Assembly’s Resolution 42 to accelerate the settlement of non-performing loans, according to Tuoi Tre newspaper.

The National Assembly issued Resolution 42 in mid-2017 approving a couple of pilot policies to settle bad debts and assets used as collateral for debts that have gone bad at local banks and foreign bank branches.

The central bank requires banks to make a comprehensive review of bad debts. As for large non-performing loans, banks should weigh the possibility of liquidating assets used as collateral for loans that have become bad. Banks should also identify what is hindering the process of settling bad debts, and come up with solutions to recover them.

Banks are also requested to coordinate with local law enforcement agencies, especially police and courts, to settle bad debt as much as they can.

Banks will have to work with the Vietnam Asset Management Company (VAMC) to solve any difficulties with the settlement of bad debts and collateral sold to VAMC.

In addition, banks should seek buyers of debts acquired by VAMC and inform customers with bad debts of their obligations to settle them and the lender’s jurisdiction over the settlement of bad debt.

Banks must improve the quality of their credit, minimize non-performing loans and submit reports to the central bank on a regular basis.

The SBV has set a target for VAMC to settle at least VND140 trillion (US$6.2 billion) of bad debts and buy debts worth VND6.6 trillion at market prices this year.

VAMC had bought over 26,200 bad debts from nearly 16,300 customers of 42 lender banks as of December 31, 2017. The original debts valued at more than VND307.9 trillion were bought at some VND277.8 trillion.

AMC also signed contracts with five banks to buy debts worth more than VND3.1 trillion at market prices from six customers.

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