Bad debts in Vietnam’s entire banking system was 3.79 percent of the outstanding loans at the end of 2013, the State Bank of Vietnam (SBV) said on January 21.

The central bank reached its initial target on settling non-performance loans (NPLs) last year, in which the Vietnam Asset Management Company (VAMC), a wholly State owned company managed by the SBV, has bought nearly 40 trillion VND (1.88 billion USD) of bad debts from banks, said Le Duc Tho, head of the SBV’s Office.

The SBV continues to set bad debt settlement as a key target of its monetary policy in 2014, Tho said, adding that it will continue implementing solutions to prevent new NPLs in the future.

In Directive 01/CT-NHNN on implementing the monetary policy and ensuring banks perform safely and more effectively in 2014, SBV Governor Nguyen Van Binh has urged SBV units and credit institutions to improve their financial capacity and governance while ensuring banking operations and handling NPLs.-VNA