Credit institutions have restructured nearly 300 trillion VND (13.63 billion USD) in debts, accounting for 10 percent of total outstanding loans.

According to Governor of the State Bank of Vietnam Nguyen Van Binh, measures used to restructure the repayment period meant large amounts of outstanding loans would remain as such, instead of becoming non-performing loans (NPLs).

As many as 60 percent of the restructured debts would have become bad loans without the restructuring, he said.

The restructuring has also eased borrowing conditions for businesses with no penalty interest payments being applied.

Binh said the measures for self-handling NPLs of banks, including debt restructuring, have yielded positive and meaningful results for both businesses and banks.

In late May, the central bank had to delay the application of Circular 2 on bad debt classification and risk management until June 2014.

The move aimed to help enterprises access credit, boost lending and reduce lending interest rates to fight looming economic downturn and rising bankruptcy rates.

As a result of the delay, credit institutions have been permitted to restructure repayment periods for loans.

Circular 2, which reflected international norms and was compatible with economic conditions, will prevent banks and financial institutions from intentional misconduct.

However, the implementation of the circular would see tighter conditions for enterprises seeking bank loans and force banks to contribute to risk funds.

Vice Chairman of the Vietnam Asset Management Company Nguyen Quoc Hung told Thoi bao Ngan hang (Banking Times) that as of November 15, the company had bought 17.3 trillion VND (786.36 million USD) in debts from 20 credit institutions.

As many as 24 banks have registered with the company to sell debts valued at 40 trillion VND (1.818 billion USD). The company is currently reviewing debts for future deals.-VNA