SBV releases regulations for VAMC

SBV releases regulations for VAMC

The State Bank of Viet Nam announced administrative procedures relating to selling, buying and solving bad debts from domestic credit institutions for the Viet Nam Assets Management Company yesterday.

The procedures include the issuance, revision, adjustment and supplement of management policies and regulation on VAMC's activities, allowing VAMC to buy bad debts at market value, approving VAMC's plans on bond issuance, financial support for credit institutions and contributing registered capital and equity.

Bad debts accounted for VND142.27 trillion (US$6.8 billion) or 4.64 per cent of total loans by Vietnamese banks at the end of August, a 20.15 per cent increase since the end of 2012, the SBV's Inspection Agency reported.

According to Chief Inspector Nguyen Huu Nghia, many measures will be taken to solve bad debts. The SBV will direct credit institutions to apply measures to recover debt and collateral and use provisions to settle bad debts and assets. It will also co-ordinate with VAMC to implement bad debt transactions.

All such activities must contribute to the objective of cutting the bad debt ratio to the safety threshold of 3 per cent by the end of 2015 as planned by the National Assembly.

VAMC is expected to eventually handle around 40-50 per cent of the bad loans in the banking system.

vietnamnews