The Government has devised a series of measures to accelerate the
settlement of bad debt and restructure credit institutions in a bid to
limit bad debt holdings to around 3 percent by late 2015.
For a
start, the Government will fine-tune the legal regulations on trading
non-performing loans (NPLs) and collaterals, and the responsibility of
borrowers and creditors.
The Vietnam Asset Management Company
(VAMC), a Government-backed entity established last year to restructure
NPLs and bank collaterals, will receive assistance to refine its
function and financial capacity and develop a debt trading market
involving domestic and foreign investors.
Credit institutions
are asked to publicise figures on the extent of bad debt they hold and
undertake efforts to reduce it, and improve their credit quality.
Inspectors will closely monitor the flow of NPLs and check whether
legal regulations on debt classification and risk provision funds are
being complied with.
Ministries, agencies and localities are required to cooperate closely.
The Government, in the meantime, will create a stable macro-economic
environment that is conducive for securities and real estate markets,
thus facilitating economic growth.
As of October this year,
Vietnam cleaned up 54.3 percent of NPLs by collecting overdue payments
and selling them to VAMC. The company acquired approximately 95 trillion
VND (4.5 billion USD) worth of bad debt and recollected around 4
trillion VND (190 million USD).
The current proportion of bad
loans is estimated at nearly 3.8 percent, down from 4.17 percent in
June, 4.11 percent in July, and 3.9 percent in August.-VNA