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Three knots are removed in the resolution of bad debt


As a longtime banker, directly involved in the bank's bad debt management, Nguyen Duc Huong, chairman of the board of LienVietPostBank, understands nowadays to handle a case related to Collateral that becomes bad debt it difficult, how complex.

Therefore, the resolution of bad debts of credit institutions has just been approved by the National Assembly, according to Mr. Huong not merely solve the difficulties for commercial banks but actually remove the deep knot In the economy after many years. This is a breakthrough integration policy that will increase national credibility in the international arena.

Credit institutions are entitled to seize assets

Of particular importance is the right to seize collateral assets of credit institutions.

Accordingly, from 15 August, if the party holding the security property of the bad debt fails to hand over the property to the credit institution, the credit institution will be allowed to seize the security property as prescribed.

However, the seizure of security property must comply with the conditions not the property dispute in the case has been collected, resolved or resolved at court or property not being applied by the court. Interim emergency measures; Not being distrained or applying judgment enforcement measures. At the same time, the credit institution authorized to seize the security property shall not be allowed to apply measures to breach the provisions of law in the course of seizing the security property.

According to the new resolution, the handling of security assets being real estate projects at credit institutions must comply with conditions such as real estate projects that have been approved by state agencies, Land, land lease, the project is not disputed or has not been resolved or resolved in court.

Head of a large bank headquartered in Hanoi said that his bank has made numerous recommendations to allow credit institutions to seize security assets but the 2015 Civil Code has dropped. The right to seize the collateral of the secured party has created the reliance of some customers to retain the property and continue to exploit for production and business.

He provided a demonstration at his bank, a client borrowing money from three banks worth more than VND 300 billion to operate a hotel in Hue City for over 5 years, while assets were dispossessed. Mortgage banks have found buyers to collect debts, but borrowers who do not hand over the property are still unprofitable to exploit up to tens of billions of dollars per year on property that by law has been the property of the Bank. The bank sued for 48 months, but the case has yet to be heard.

"If you can handle that hotel and sell it to get the principal, but for a few more years, then it's all going to be depreciated, and it's hard to get 50% of the loan value," said the bank's chief. strong.

Another noteworthy point to support credit institutions in seizing assurance assets is that the Resolution clearly states: "The Ministry of Public Security is responsible for directing public security agencies at all levels to carry out their tasks of preservation Security and order when credit institutions, foreign banks, etc., deal with bad debts, exercise the right to seize the security assets of bad debts, "local authorities at all levels and police offices seize the financial holdings Product guarantee.

Huong said that this is the first time the coordination between the authorities and police at the place of seizing the security property is specified in the Resolution. This is expected to solve the biggest obstacle in the process of capturing collateral assets of credit institutions as well as help banks to handle the asset guaranteed faster with higher selling price.

Shorten your time in court

The resolution also stipulates that the court shall apply simplified procedures to settle disputes over obligations to deliver security assets or disputes over the right to dispose of collateral assets of bad debts of credit institutions and branches. Foreign banks, bad debt trading.

To better understand this issue, Doan Doan Son, Director of the SBV's Legal Department, said that the conditions for the application of the procedure are reduced when the security contract contains an agreement on the securer's meaning. Assignment of collateral assets of the bad debt to the secured party or credit institutions, foreign bank branches, VAMC has the right to handle security assets; Secured transactions, registered security measures in accordance with the law; There are no persons residing abroad and assets disputed in foreign countries, unless the involved parties abroad and the involved parties in Vietnam agree to request the Court to settle the case according to the abridged procedures or the litigants. Explain the evidence about the legal ownership of property and have agreed on the disposal of property.

Judging by this resolution, Truong Thanh Duc, Chairman of the Board of Directors of Basico Law Firm, acknowledged that this resolution is newer because a court case has often taken a long time, many years. This is one of the causes leading to bad debts accumulation, slow to be processed.

German lawyer analyzed, in recent years, most of bad debt of the banking industry has been extended, adjust the maturity and debt restructuring in different forms. Therefore, it is possible to estimate the maturity of debt as follows: On average, the loan term is about one year, the maturity period is plus one year and the time to process bad debts is About 3 years. Thus, a one-year short-term debt has unwittingly become a five-year long-term debt, calculated to exceed 5 times, or exceeded 500% of the plan.

According to Vo Tan Hoang Van, General Director of Saigon Commercial Joint Stock Bank (SCB), SCB has been suing for three to four years, but has not yet been released. judge. This is also the common situation of many banks leading to the long-term asset disposal, causing difficulties in debt collection.

"With this resolution opening a positive direction is a shortened procedure, of course, the reduction is still awaiting court guidance. The drafting agency also says that shortening of time is not expected to be shortened in the way we expect it to. It can not be a few weeks, a few months have resolved a case that still months, even years. These are the difficulties in the long run, "Duc emphasized.



Credit institutions are allowed to sell debt under book value.
Illustration.
Photo: TH / Vietnam +)

 

Allow to sell bad debt below value

Another important point is that the resolution allows credit institutions and VAMC to sell bad debts, collateral assets of bad debts publicly and transparently, according to the law, the selling prices are appropriate to the prices. Market, which may be higher or lower than the principal balance of the debt. This regulation is to clearly define the right of sellers to sell bad debts and security assets in accordance with the law, including the sale of debt principal.

Currently, VAMC can only buy bad debt accounted in the table. This rule restricts the object of bad debts to be traded at market prices. Therefore, in addition to the purchase and sale of loans in the balance sheet, the Resolution allowed VAMC to buy bad debts using the risk reserve being booked off-balance sheet and convert the bad debts that VAMC bought with the left Special coupons to buy at market value.

Mr. Doan Son emphasized that this will improve the quality in a more sustainable way than the assets of the credit institution. Credit institutions and VAMC sell their debt at market value to obtain debt in cash for the purpose of expanding investment, new credit, freeing up bad debts, reducing opportunity costs and Improve the profitability of the credit institution. In addition, credit institutions also reduced the bad debt sold to VAMC by special bonds to completely eliminate bad debt and improve the quality of its assets.

In addition, according to Mr. Son, when selling off bad debts are accounted under the table, credit institutions will have extra incomes and improve capacity such as provision for losses due to transfer Bad debts purchased from special bonds to buy at market value and provision for dealing with bad debts are accounted in the table, creating incentives for credit institutions to sell bad debts under Market value.

At the same time, allowing the transfer of bad debt bought with a special bond to market value will help create a debt market at market prices, ensuring market discipline in dealing with bad debt.

 

According to Thuy Ha
Vietnam +

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