The central bank-run Vietnam Asset Management Company (VAMC), dubbed as the bad debt bank, plans to purchase non-performing loans (NPLs) worth VND3.5 trillion (US$149.3 million) in cash at market value, stated the company.
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To achieve these target, VAMC requested the State Bank of Vietnam (SBV) and related government agencies to provide detailed guidance on the implementation of the National Assembly's Resolution No.42, which regulates special pilot treatment of bad debts at credit institutions and came into force in August 2017.
Specifically, the Ministry of Natural Resources and Environment (MONRE) is expected to instruct on the procedure of collateral assignment being unfinished real property projects, while the Supreme People's Court shall provide simplified guidelines for application of law in terms of settlement of disputes over collateral.
VAMC stated the company will also provide new services including capital contribution, share purchase, investment, brokerage, among others.
Notably, the bad debt bank requested to be provided in full VND5 trillion (US$213.2 million) of charter capital under Prime Minister Nguyen Xuan Phuc's decision, aiming to have sufficient capital for the purchase of bad debts under market value.
According to the report, VAMC will create favorable conditions for investors to access information with regard to bad debts and collateral.
By the end of December 31, 2017, VAMC purchased more than 26,000 debts with special bonds from 42 credit institutions worth VND309.7 trillion (US$13.61 billion) at book value for VND279.2 billion (US$12.27 billion).
VAMC also successfully acquired debts worth VND3.14 trillion (US$138 million) at market value during this period, meeting the target set by the State Bank of Vietnam (SBV).
In 2017, VAMC in collaboration with credit institutions reclaimed VND30.8 trillion (US$1.35 billion) in soured loans, up nearly VND2 trillion (US$87.9 million) year-on-year and 40% above the initial target.
