The regulation that only non-performing loans (NPLs) can be received, managed or handled under authorization is aligned with the core objective of establishing debt management companies: to focus on resolving bad debt. This also helps prevent credit institutions from using debt management companies to manipulate figures or distort the actual state of bad debt. Efforts by the regulator Total NPLs in Vietnam’s banking system, including those sold to the Vietnam Asset Management Company (VAMC) and other potential problem loans, have surpassed VND1,000 trillion (approx. US$40 billion). The number is seen continuing to rise, albeit at a slower pace than during 2023-2024. As many analysts have noted, bad debt remains a major hindrance to efforts to lower lending interest rates across the economy. In May 2025, the National Assembly began debating a proposal to incorporate key provisions of Resolution 42/2017/QH14—which piloted bad debt resolution—into the amended Law on Credit Institutions. This move is expected to provide a stable and long-term legal framework for more effective debt resolution, while also protecting the interests of credit institutions, depositors and borrowers. The effective settlement of bad debt would ease provisioning pressure on credit institutions, enabling them to lower interest rates for loans. Data from […]
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