Monday, September 25 2017

VietNamNews

Bad debts at $7b until March 31

Update: May, 22/2017 - 18:00
Total non-performing loans (NPLs) of the entire credit institutions (CI) system until March 31, 2017 were VNĐ160 trillion (US$7 billion). - Photo ndh.vn
Viet Nam News

HÀ NỘI – Total non-performing loans (NPLs) of the entire credit institutions (CI) system until March 31, 2017 were VNĐ160 trillion (US$7 billion).

This was stated in a Government report released today at the National Assembly (NA)’s meeting.

The number, which was exclusively NPLs sold to the Việt Nam Asset Management Company (VAMC), was equal to 2.56 per cent of the institutions’ total outstanding loans.

According to the report, the entire system of CIs recovered NPLs valued at more than VNĐ610 trillion in the 2012-16 period. Of the total, over 56 per cent were settled by the institutions themselves and the remaining were sold to VAMC and other individuals and institutions.

However, the restructuring of ailing CIs and settlement of bad debts still faced difficulties.

At this NA meeting, the Government submitted a resolution on bad debt settlement for approval. Following the approval, the Government will instruct relevant ministries and agencies to streamline legal regulations on restructuring ailing CIs so that settlement of bad debts is more effective.

As per the State Bank of Việt Nam’s (SBV) reports, after four years of implementing a project on restructuring the CIs system in 2011-15, there have been achievements, such as restructuring of a number of ailing banks and safety of the banking system and assets of the State and the people.

However, because of inadequate legal regulations, there remain obstacles to speeding up the restructuring of ailing banks and settlement of bad debts.

While dealing with weak CIs, SBV found the current regulations to be inadequate.

According to the central bank, the process of recovery and restructuring of weak CIs is difficult because there is no legal basis for applying solutions suitable to the situation. Also, there is no effective financial support to help weak CIs recover.

The law on the handling of mortgaged assets to recover debts still has many inadequacies related to the confiscation of mortgaged assets, especially land, which limits the progress and effectiveness of debt settlement.  – VNS

 

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