Fears of bad debt will increase in Q2 financial statement


According to some experts, the resolution only applies to the bad debts as of 15/08/2017 will lead to the possibility that many banks recorded additional bad debt in the second quarter.

On June 21, the National Assembly passed Resolution on handling bad debts of credit institutions. The purpose of the Resolution is to speed up the process of dealing with bad debt by creating a legal document that temporarily regulates the conflicts that cause impediments to the process of dealing with bad debts as set forth in the documents. Other majors.

The content of the resolution on bad debt includes 19 articles, the scope of adjustment includes all bad debts incurred up to 15/08/2017. Thus, the scope of non-performing loans was lower than the expectation of the drafting body, but still broader than some of the comments from the parliamentarians raised during the previous discussions.

This resolution gives more credit to bank creditors, VAMC ... the rights related to asset disposal are much more liberal than the current regulations, such as the reduction of processing procedures, awarded The right for the bank to recover collateral without dispute ...

Regarding the principle of dealing with bad debt, the Resolution upholds the view not to use the State budget to handle bad debts; Organizations and individuals committing acts of law violation for the occurrence of bad debts must bear responsibility according to the provisions of law.

In terms of bad debt sales, the highlight of the resolution is allowing bad debt to be sold at market prices, which may be lower than the book value of the debt. This regulation will have a big impact on the state-owned commercial joint stock banks. Previously, if the sale of debt under book value, banks will face legal risk on charges of "loss of state property."

However, according to some experts, the resolution only applies to bad debts as of 15/08/2017 will lead to the possibility that many banks recorded additional bad debts in the second quarter present. This is a phenomenon that is quite likely to occur because with subsequent debts will not be entitled to privileges like old bad debt. Nonetheless, experts say that it is not too concerned about this issue as it only relates to the method of accounting. The nature of the problem will not change much.

Minh Phuong
According to the Times

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