Total non-performing loans of the entire credit institutions system until March 31, 2017 were 160 trillion VND (Photo: VNA) Hanoi (VNA) – Total non-performing loans (NPLs) of the entire creditinstitutions (CI) system until March 31, 2017 were 160 trillion VND (7 billionUSD).
This was stated in a Government report released on May 22 at the NationalAssembly (NA)’s meeting.
The number, which was exclusively NPLs sold to the Vietnam Asset ManagementCompany (VAMC), was equal to 2.56 percent of the institutions’ totaloutstanding loans.
According to the report, the entire system of CIs recovered NPLs valued at morethan 610 trillion VND in the 2012-16 period. Of the total, over 56 percent weresettled by the institutions themselves and the remaining were sold to VAMC andother individuals and institutions.
However, the restructuring of ailing CIs and settlement of bad debts stillfaced difficulties.
At this NA meeting, the Government submitted a resolution on bad debtsettlement for approval.
Following the approval, the Government will instruct relevant ministries andagencies to streamline legal regulations on restructuring ailing CIs so thatsettlement of bad debts is more effective.
As per the State Bank of Vietnam (SBV)’s reports, after four years ofimplementing a project on restructuring the CIs system in 2011-15, there havebeen achievements, such as restructuring of a number of ailing banks and safetyof the banking system and assets of the State and the people.
However, because of inadequate legal regulations, there remain obstacles tospeeding up the restructuring of ailing banks and settlement of bad debts.
While dealing with weak CIs, SBV found the current regulations to beinadequate.
According to the central bank, the process of recovery and restructuring ofweak CIs is difficult because there is no legal basis for applying solutionssuitable to the situation. Also, there is no effective financial support tohelp weak CIs recover.
The law on the handling of mortgaged assets to recover debts still has manyinadequacies related to the confiscation of mortgaged assets, especially land,which limits the progress and effectiveness of debt settlement.-VNA
VNA
