Restructure the system of credit institutions associated with dealing with bad debt

Prime Minister Nguyen Tan Dung has approved Decision 1058 / QD-TTg approving the project "Restructuring the system of credit institutions associated with dealing with bad debt in the 2016-2020 period".

The scheme aims to continue to restructure the system of credit institutions with a focus on basically dealing with bad debts and weak credit institutions in forms suitable to the market mechanism in the former. Prudently caution, ensuring the interests of depositors and maintain the stability and security of the system; To reduce the number of poor credit institutions so as to have a number of appropriate credit institutions of a size and prestige, to operate in a healthy manner and ensure liquidity.

In particular, the general solution to restructure the system of credit institutions associated with dealing with bad debts in the period of 2016-2020 includes: perfecting the legal framework, mechanisms and policies on monetary and banking activities; Improving the financial capacity, transforming the business model, administration and administration of the credit institution; To intensify the renovation of the banking inspection and supervision work; Support solutions.

Strengthening the reform of banking inspection and supervision

The decision states that the State Bank of Vietnam's early warning capability should be strengthened to address potential systemic risks and prevent the risk of breach of banking sector laws by credit institutions, Foreign bank branch.

Renovate the supervision in the direction of improving the effectiveness of micro-security monitoring and macro-safety monitoring on the basis of implementing new tools and methods of risk monitoring associated with application promotion. Information Technology. Surveillance must be closely linked to the inspection, licensing and issuance of regimes and policies.

To renovate the inspection work in the direction of intensifying the comprehensive inspection, legal persons of the credit institution, in line with the actual operation of the credit institution; To combine the inspection and supervision of the observance of policies and laws with the inspection and supervision of risks in the activities of banking inspectorates and banking supervisors and apply the inspection method, Risk-based monitoring in accordance with international practices and standards.

Orientations for restructuring credit institutions

The scheme provides guidelines and solutions for the restructuring of commercial banks with more than 50% of charter capital held by the State (excluding compulsory commercial banks). Accordingly, commercial banks with more than 50% of charter capital owned by the State play the role of key and dominant force in terms of scale, market share and market regulation; Leading in the application of modern banking technology, advanced management capacity, high business efficiency, safety in operation, active international integration; To actively participate in the restructuring of weak credit institutions under the direction of the State Bank of Vietnam; Do business in accordance with the market mechanism and comply with the law.

Besides, to further reorganize and rearrange joint-stock commercial banks, financial companies and financial leasing companies in order to make them sound and improve their financial capacity, both in terms of scale and quality, Effectively, ensure system safety; Market-oriented, transparent and transparent business activities that fully meet the standards of banking management and safety in accordance with the law and are in line with international practices.

To enhance the role and responsibility of the cooperative bank in regulating capital, supervising the use of loan capital and repayment capability of customers; To provide guidance, training in banking operations, information technology, and support to banking activities for members' credit funds; To participate in the handling of people's credit funds in difficulty members or signs of unsafeness in their operations.

To continue consolidating, consolidating and raising the level of safety and efficiency of the existing people's credit funds in parallel with firmly expanding the new people's credit funds in rural areas; The main scope of activities of people's credit funds is to mobilize capital and provide loans to members in the area, especially in rural areas in order to mobilize local resources to contribute to local economic development. Ways to eradicate hunger, reduce poverty and push back usury; To ensure that people's credit funds operate on the principle of voluntariness, autonomy and self-responsibility for their performance and the main aim is mutual assistance among members.

Solutions to deal with bad debt

Regarding the solution of dealing with bad debt, the Scheme states, the State Bank of Vietnam, ministries, branches, People's Committees of provinces and cities under central authority, credit institutions, VAMC and organizations and individuals. Relevant personnel continue to implement urgent, drastic, synchronized solutions.

Specifically, to continue implementing solutions to deal with bad debts in accordance with Decision No. 843 / QD-TTg dated 31/05/2013 of the Prime Minister, in which credit institutions re-evaluate the quality And the possibility of recovery of the debt to take appropriate measures; Enhance the provisioning and use of risk provisions to deal with bad debts; Continue to restructure debt, support capital for customers to overcome difficulties and recover; To supplement and complete legal documents on security assets; Collection of debts and disposal of security assets; Strict control and reduced operating costs; To minimize bad debts arising in the future.

Borrowers must consolidate themselves, streamline their operations, improve their financial capacity, administer, enhance technology adoption and competitiveness; Actively, actively cooperate with credit institutions to develop and implement plans to restructure debts, remove difficulties in production and business; To actively develop the market for goods consumption and export promotion; To actively participate in programs and solutions to support enterprises run by the Government, ministries, branches and localities.

The State Bank of Vietnam, ministries, branches and localities continue to implement monetary, credit and banking mechanisms and policies; At the same time, it will remove difficulties for production and business, support the market, reduce inventory, promote consumption of goods, stimulate investment and consumption in the country; Develop real estate market, stock market.

The State Bank of Vietnam intensifies inspection and supervision of credit institutions in the implementation of regulations on credit extension, operational safety and debt classification and risk provisioning; The State Bank of Vietnam and other ministries and sectors continue to perfect the legal framework and promote the management, inspection and supervision of monetary, banking, securities, insurance and home businesses. country.

VAMC will focus on reviewing, classifying and re-evaluating borrowers, collateral and purchased debts to determine debt recovery capacity and appropriate solutions; To deploy vigorously and synchronously solutions to purchase, sell and treat non-performing loans under the market mechanism; To intensify the close coordination with credit institutions in the recovery of debts, restructuring of debts, sale and handling of debts and security assets for purchased bad debts; Financial support for borrowers to restore production and business, completing unfinished projects; Strengthening the asset valuation and assessment capabilities; To regularly and promptly publicize the purchase, sale and disposal of bad debts; Coordinate with concerned units to continue studying and perfecting organizational and operational models.

Besides, there is a solution on legal framework, policy mechanism on dealing with bad debt, security assets; Develop debt trading market; Solution to buy bad debt according to market value and improve the financial capacity of VAMC; The solution to deal with bad debts related to the capital construction debt originated from the central budget, local and bad debts of state enterprises, bad debts for loans under the programs and projects, Appointed by the Government, the Prime Minister, Government guaranteed debt.

According to Hoang Dien

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