Project on credit institution restructuring gets PM’s approval hinh anh 1Illustrative image (Source: VNA)
Hanoi (VNA) – The Prime Minister has issued Decision 1058/QD-TTg approving a project on restructuring the system of credit institutions in combination with settling bad debt for the 2016-2020 period.

The project aims to restructure credit institutions and settle bad debt on the  principles of ensuring the interests of depositors and maintaining the stability and safety of the banking system, and reduce the number of badly performing credit institutions.

Overall solutions include completing the legal framework, perfecting policies and mechanisms related to monetary and banks’ operations, improving the financial and business administration capacity of credit institutions, and bettering inspections and supervisions over banks’ operations.

The project stresses the need to improve the capacity of the State Bank of Vietnam (SBV) to make early warning of systematic risks and to prevent the risk of law violations of credit institutions and foreign banks’ branches.

Inspection work will be reformed on the basis of using new risk control tools and methods.

The project also puts forward orientations and measures to restructure commercial banks in which the State holds more than 50 percent of chartered capital, and improve operations of joint stock commercial banks, financial and financial leasing companies.

For bad debt settlement measures, the project asks the SBV, ministries, localities, credit institutions, Vietnam Asset Management Company (VAMC), and organisations and individuals involved to continue implementing the Decision No.843/QD-TTg on settling bad debts of the credit institution system.

Credit institutions are required to review the quality and recovery possibility of outstanding debts, while continuing to restructure debts.

The SBV, ministries and localities are requested to continue implementing measures related to monetary, credit and banking policies and mechanisms, along with solving difficulties for business and production activities, and stimulating consumption.

The SBV needs to intensify inspections and supervisions on credit institutions’ observance of rules on credit, safe operation and debt classification, while the VAMC focuses on classifying borrowers, mortgage assets and loans, coordinating closely with credit institutions in taking back and restructuring debts and selling debts and guarantee assets, and providing financial assistance for borrowers to recover business and production and complete unfinished projects.

The country’s system of credit institutions currently includes State-owned banks, joint stock banks, finance companies, financial leasing companies, foreign credit institutions, co-operative banks, People’s credit funds and microfinance institutions.-VNA