|Credit institutions will be refinanced loans up to 70 per cent of the VAMC's bonds. Photo tienphong
HA NOI (VNS)— The State Bank of Viet Nam (SBV) will offer refinancing loans to credit institutions up to a maximum of 70 per cent of the price of bonds issued by the Viet Nam Assets Management Company (VAMC) during the bad debt resolution process, according to a SBV circular issued on Tuesday.
The refinancing will be applicable only to domestic credit institutions and not wholly-foreign investment companies or joint ventures.
To receive the refinancing, credit institutions will have to own unpaid special bonds issued by VAMC, and set up annual funds for provision of VAMC's bonds according to Government Decree 53/2013/ND-CP and the SBV guidelines.
The refinancing rate for the loans will be decided by the Prime Minister in every period.
SBV also issued another circular, 19/2013/TT-NHNN, giving concrete regulations for VAMC's operation. It includes conditions for bad debts purchased using VAMC's bonds, restructuring of purchased bad debts, as well as a mechanism for reducing or exempting interest rates for bad debts in every concrete case.
Both circulars will come into effect on September 15, 2013. They are expected to fit enough of a legal frame for VAMC to buy bad debt using its special bonds.
VAMC started operation on July 26 with a registered capital of VND500 billion ($23.61 million). It's expected to resolve VND30 trillion ($1.42 billion) worth of bad debts this year. — VNS