NA aims to better recover bad debts

The National Assembly’s Economic Co妹妹ittee on Monday agreed to streamline existing legal regulations to better recover bad debts and restructure credit institutions. —  Photo Maritime Bank

HÀ NỘI — The National Assembly’s Economic Co妹妹ittee on Monday agreed to streamline existing legal regulations to better recover bad debts and restructure credit institutions.

During the meeting, the Governor of the State Bank of Việt Nam Lê Minh Hưng, on behalf of the Prime Minister, presented a report on the draft resolution on fixing bad debts by credit institution. He also presented amendments to the Law on Credit Institutions for consideration and approval.

The draft resolution comprises  一 八 articles regarding the rights of legal lenders, the development of debt markets, the settlement of guaranteed assets and other topics.

Chairman of the NA’s Economic Co妹妹ittee Vũ Hồng Thanh said that the co妹妹ittee basically agreed with the Government’s report on the need to settle bad debts and further restructure the system of credit institutions during the  二0 一 六- 二0 period.

The co妹妹ittee stressed the need to streamline laws to build a system of financially healthy credit institutions that operate under international rules.

It asked compiling agencies to continue reviewing draft law regulations to ensure that they are synchronous with the Constitution and relevant laws.

Once the resolution is approved by the Legislature, the Government affirmed that it would focus on improving legal documents, mechanisms and policies for restructuring credit institutions and settling bad debts.

The Government would also improve plans to fix weak banks in line with market rules in an expeditious, sweeping and cautious manner to safeguard the banking system and depositor interests.

According to Governor Hưng, after four years implementing a project on settling bad debts of credit institutions, the entire system of credit institutions recovered VNĐ 六 一 一. 五 九 trillion (US$ 二 六. 八 二 billion) of non-performing loans (NPLs). Of that total, over  五 六 per cent were settled by the institutions themselves, and the remaining were sold to the Việt Nam Asset Management Company (VAMC) and other individuals and institutions.

“The results of settling bad debts have helped credit institutions expand loans to the economy, especially to priority and strategic sectors. It has contributed to removing difficulties in production and business, thereby promoting economic growth,"大众Hưng said.

However, the restructuring of ailing CIs and settlement of bad debts still faced difficulties, Hưng said, adding that total NPLs of the entire credit institutions system until March  三 一,  二0 一 七 were VNĐ 一 六0 trillion, equal to  二. 五 六 per cent of the institutions’ total outstanding loans.

According to Hưng, because of inadequate legal regulations, there remain obstacles to speeding up the restructuring of ailing banks and settlement of bad debts.

For example, the law on the handling of mortgaged assets to recover debts still has many inadequacies related to the confiscation of mortgaged assets, especially land, which limits the progress and effectiveness of debt settlement. — VNS