Key highlights of the regulatory framework include:
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Comprehensive Scope and Applicable Entities: The regulations apply to VAMC, Vietnamese credit institutions, borrowing customers, guarantors, and relevant organizations and individuals involved in bad debt trading and special bond operations.
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Flexible Debt Trading Operations via Two Main Mechanisms:
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Purchasing bad debts using special bonds: Applied to eligible bad debts meeting standard criteria (backed by legal collateral, valid documentation, and meeting minimum value thresholds). Special bonds issued by VAMC are eligible for refinancing transactions at the SBV.
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Purchasing bad debts at market value: Implemented for debts assessed with full recovery potential, realizable collateral, and viable repayment plans.
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Debt Restructuring and Customer Financial Support: VAMC is empowered to adjust interest rates reasonably, exempt or reduce overdue interest, fees, and penalties, restructure repayment terms, or implement financial support measures and equity participation to help customers restore business operations.
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Risk Management and Provisioning: Selling credit institutions are required to annually provision against special bonds, strictly adhere to capital adequacy limits, and maintain close coordination and supervision with the SBV.
The enhancement of VAMC’s operational legal framework reaffirms the State Bank of Vietnam's determination to clean up the balance sheets of credit institutions, stabilize the monetary market, and support sustainable economic growth.
by VNBA News
