Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh on August 21 took the floor to answer deputies and voters questions on the settlement of bad debts, measures to facilitate businesses’ access to capital and the implementation of restructuring projects.

Binh told the televised Q&A session, which was part of the on-going 10 th meeting of the National Assembly Standing Committee, that Vietnam ’s bad debts are yet to reach an alarming level as credit organisations have contributed 70 trillion VND (over 3.3 billion USD) to a reserve fund and some 84 percent of bad debts have guarantee assets.

“If we have a suitable mechanism, these bad debts can be solved at the lowest cost,” he said.

Regarding measures to address bad debts, the governor stated that the SBV has basically changed its important document system for the operations of Vietnamese credit organisations.

These documents, especially those related to credit activities, will be issued in August or September this year and are expected to take effect in early 2013, he added.

According to Binh, the state bank will harmonise the monetary and fiscal policies, speed up public spending, improve the supervision and efficiency of credit organisations and set up reserve funds to deal with credit organisations’ bad debts.

The SBV’s reorganisation of inspectors and its inspections at nine banks in the recent past has proven effective, helping affirm the position of the state bank’s inspection system, he said.

The bank will also coordinate with local authorities and courts at all levels in selling mortgaged assets in the banking system to create capital sources for handling bad debts.

It will encourage credit organisations with healthy financial sources to purchase the debts of other credit organisations as well as negotiate with businesses to turn debts into shares, helping remove difficulties for them.

The governor affirmed that the biggest goal of Vietnam now is to restructure its economy intensively in an effective direction, focusing on commercial banks.

He said that lowering banks’ bad debts to a safe level, at about 3-5 percent, is a top target of the SBV. At present, the entire banking system is making efforts to reduce bad debts, however, this depends much on the domestic and international economic situation.-VNA