VNBA held a discussion on the Draft Circular on the operations of AMCs

Legal Framework and Practical Challenges

In his opening remarks, Dr. Nguyen Quoc Hung emphasized that the Draft Circular plays an important role in perfecting the legal framework for debt trading and asset handling in the banking system. He pointed out that the practical context is giving rise to many new situations, requiring a flexible, transparent and system-safe legal mechanism.

VNBA has compiled comments from members, but found that some provisions in the Draft are unclear, which may cause difficulties in the implementation process. Dr. Hung emphasized that although operating under the Enterprise Law, AMCs still need to comply with the SBV's strict supervision regulations, especially in handling bad debts. Therefore, the Circular needs to ensure a balance between risk control and promoting effective operations.

Opinion contributions from the discussion participants

In the spirit of openness, Dr. Nguyen Quoc Hung called on delegates to contribute their opinions directly to the Draft to adjust inappropriate contents.

Mr. Do Giang Nam, Chairman of the Debt Handling Club (AMC Club) under VNBA, presented a summary of the opinions, focusing on the following main points:
• Expanding the scope of AMC's operations: Proposing that AMC is not only an "extended arm" in handling bad debts but also a dynamic business entity.
• Clarifying legal problems in handling secured assets: In order to eliminate legal "gray areas" and reduce risks.
• Synchronizing regulations with the general legal system: Ensuring that regulations have a safe "stop".
• Authorize AMC to manage and exploit assets: Propose to add subsidiaries and affiliates of credit institutions with AMCs to the authorized entities, in order to optimize resources and promote the proactiveness and flexibility of AMCs.

• Expand the scope of debt: Propose that AMCs are allowed to manage and purchase overdue debts arising from loans, guarantees, financial leases, assets with Credit/Overdue Debt and other receivables according to the balance sheet, following the Law on Credit Institutions 2024 and Circular No. 31/2024/TT-NHNN.

• Expand the scope of "asset exploitation": Object to the Draft (Clause 1, Article 5) which only limits the exploitation of assets associated with "bad debts". Propose to allow AMC to exploit unused assets of parent credit institutions/subsidiaries to optimize asset use, increase revenue and business efficiency.

• Application of the law on debt trading: Request clarification on whether AMC debt trading is subject to Circular 09/2015/TT-NHNN and Circular 18/2022/TT-NHNN or only the Civil Code.

• Guidance on reporting forms: Suggest adding guidance on forms and focal units receiving reports from SBV for unified implementation by credit institutions.

Representatives of major credit institutions such as Vietcombank, BIDV, VietinBank, MB, ACB, VIB also contributed practical opinions:
• Vietcombank: Suggest clarifying the management mechanism for AMCs that are not directly under the parent credit institution but are subsidiaries of affiliated credit institutions (for example, the case of Construction Bank - CB).
• VietinBank: Propose to clearly distinguish between "bad debt" and "overdue debt that has been handled and transferred off-balance sheet" to avoid misunderstandings.

• BIDV: Proposes to allow AMC to exploit and manage the assets of the parent credit institution to unify the focal point and increase efficiency.

• VIB: Proposes that the assets should be transferred to AMC for ownership and handling when AMC invests in debt purchase. At the same time, opposes the regulation that AMC can only hold assets for a maximum of 5 years, arguing that this period is not consistent with the reality of asset handling.

Representatives of the SBV Departments and Bureaus (Department of Credit, Department of Legal Affairs, Department of Credit Institution System Safety) acknowledge the valuable comments and commit to receiving, synthesizing, and editing the Draft.

Orientation to complete the Circular

Concluding the meeting, Dr. Nguyen Quoc Hung highly appreciated the discussion opinions. He affirmed that developing the debt trading market is a long-term strategic orientation of the banking industry, with the core role of AMC. He emphasized the need to create a suitable legal corridor for AMC to operate independently, transparently and professionally.

To ensure the feasibility and effectiveness of the Circular, Dr. Hung suggested:

• Continue to carefully review the important contents and ensure that the regulations are realistic, clear and consistent with current laws.

• Before promulgation, there should be a comprehensive summary report of 20 years of AMC's operation to objectively evaluate and complete the policy.

• Clearly define the permitted and unauthorized activities of AMC, provide detailed instructions to avoid confusion.

VNBA will fully synthesize opinions, group them by content and closely coordinate with relevant units of SBV to report, with the goal of building a Circular that both effectively controls risks and creates conditions for AMC to develop sustainably and legally.

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