The government has decided to raise the Vietnam Asset Management Company's (VAMC) charter capital to 2 trillion VND (93.89 million USD) from 500 billion VND (23.47 million USD).

The adjustment is part of the prime ministerial decree 34/2015/ND-CP, issued on March 31, which revises and supplements a number of clauses of the decree 53/2013/ND-CP, issued on May 18, 2013.

The decree, based on the State Bank of Vietnam's (SBV) proposal, allowed the VAMC to issue bonds to purchase debts at market price (instead of prices fixed by lenders based on inflated collateral evaluation, as has been done thus far).

The bonds issued by the VAMC are not required to apply the condition of corporate bond release under the provisions of the government. The rules for mobilising capital, as prescribed by the government – regarding the State's investment capital in businesses and financial management of the wholly State-owned enterprises – will also not be applied.

The central bank will regulate the VAMC's detailed bond issuance. The company's bonds, which are held by credit institutions, can be used to participate in market transactions and refinancing at the SBV.

If the auction of guaranteed assets (non-performing loans) fails, the VAMC can sell the assets through another auction or sell directly to the buyers.

Last year, the VAMC bought non-performing loans worth about 96 trillion VND (4.57 billion USD), raising the total bad debts it had purchased from credit institutions to 135 trillion VND (6.43 billion USD), or 3.4 percent of the total outstanding loans.-VNA