PM Phuc orders related authorities to deal with bad debts
Thursday, 2017-07-20 04:12:14
NDO – The Prime Minister circulated Directive No. 32/CT-TTg dated July 19, 2017, requesting that the concerned ministries and agencies implement Resolution No. 42/2017/QH14, recently passed by the National Assembly (NA), on piloting bad debt handling at credit institutions.
At its third sitting last month, the 14th NA passed Resolution No. 42/2017/QH14, which stipulates several key measures to deal with bad debts and assurance assets for bad debts, with the aim of removing the current legal problems and difficulties related to the handling of bad debts and assets secured by debts of credit institutions.
The resolution targets the creation of a synchronous, effective and feasible mechanism for the prompt and definitive handling of bad debts, ensuring that credit institutions continue to play their leading role as a channel for capital mobilisation in order to meet the requirements for production and business operation of the economy.
To timely and effectively implement the resolution, PM Nguyen Xuan Phuc has requested that ministers, heads of the ministerial-level agencies, heads of agencies attached to the Government, and chairpersons of local People's Councils and People's Committees concentrate on directing the prompt and effective implementation of provisions under the NA’s resolution, whilst at the same time directing the implementation of measures to prevent and minimise bad debts and increase the credit quality of credit institutions.
The government leader urged to promote the role of Vietnam Asset Management Company (VAMC) in dealing with bad debts; striving to reduce the bad debt ratio in the credit system, bad debts sold to VAMC and bad debts undergoing debt classification measures to under 3% (excluding the bad debts of weak commercial banks which is to be handled under specific solutions approved by the government).
To prepare the necessary conditions for implementation, the PM requested the related ministries, branches and localities to complete the dissemination of the NA’s resolution prior to August 15.
The Ministry of Natural Resources and Environment shall assume the prime responsibility for and coordinate with the concerned agencies in guiding the registration of mortgages for land use rights and assets attached to land under the provisions of the resolution. The State Bank of Vietnam should host and coordinate with the concerned agencies in guiding the purchase and sale of the bad debts of the VAMC according to the resolution provisions. Guiding documents for implementation of the resolution must also be issued before August 15.
PM Phuc also assigned the Ministry of Justice to direct the enforcement agencies at all levels to implement the regulations on civil judgment execution related to the bad debts of credit institutions and VAMC, according to the NA’s resolution provisions; while focusing on directing and organising the prompt and lawful execution of judgments related to credit and banking which has taken legal effect.
The Ministry of Public Security should direct public security agencies at all levels to maintain security and order when credit institutions and the VAMC exercise the right to seize security properties of bad debts in line with the resolution provisions.
The Ministry of Natural Resources and Environment has been asked to direct property ownership and usage rights registries to carry out procedures for transferring the property ownership and usage rights to purchasers and receivers of the security properties undertaking bad debts of credit institutions as stipulated in the resolution.
The PM also assigned the Ministry of Planning and Investment to assume the prime responsibility for and coordinate with the concerned agencies in elaborating plans for the allocation of capital sources for the settlement of debts related to bad debts falling under the State budget spending responsibility and bad debts of the loan programmes designated by the Government.
Local governments were urged to take responsibility in working out a plan for the allocation of funds for the payment of arrears related to bad debts that falls within the responsibility of the local budget.
The State Bank of Vietnam is responsible for supervising and inspecting credit institutions and the VAMC during the implementation of the resolution.
PM Phuc assigned the State Bank of Vietnam to coordinate with the Ministry of Justice and relevant ministries and sectors to review and report to the Government, before August 15, 2021, on the proposal to improve the legal system on handling of bad debts and security assets on the basis of the practical application of provisions under the NA’s resolution.
In addition, the State bank is also responsible for finalising the regulatory framework on the governance of credit institutions, especially risk management, while continuing to study and propose the perfecting of legal documents on the credit level of credit institutions to limit incurred bad debts, as well as enhancing the inspection and supervision capacity of banking inspection and supervision agencies.
The Ministry of Justice is responsible for finalising and submitting to the Government for issuance of a decree on secured transactions.