Regulations on asset management company issued

24/05/2013 12:05

The PM has agreed to regulations on the setting up of an asset management company to address nearly US$5 billion non-performing loans and promote credit growth in the banking system.

   Under Decree 53/2013/NĐ-CP which will take effect on July 9, 2013, the asset management company would be wholly state-owned; managed and     supervised by the State Bank of Viet Nam.

  The company would have an initial charter capital of VND500 billion (US$24 million).

  It would buy non-performing loans of credit organizations; reclaim and deal with bad debts, restructure loans and adjust conditions for loan payment.     

  It will issue zero-coupon bonds in exchange for banks’ bad debts. The bonds will have a maturity of five years and lenders can use them as collateral to get refinancing funds from the central bank.

  Non-performing loans must meet five conditions: being bad debts as stipulated by SBV; being guaranteed assets; having legal documents; being existing customers; and having a balance that is higher than the level set by SBV’s regulations.

  Lenders with bad-debt ratios of 3% and above will be required to comply with the Decree or being put under investigation.

  The Government’s statistics showed that as of February 8, bad-debt ratio at Vietnamese banks dropped to 6% of total outstanding loans. Credit grew 2.1% in the first four months of the year, after hitting the 9% level in 2012./.

 Source: news.gov.vn



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