However, interest rates on NPLs denominated in Vietnamese dong and the Euro will remain unchanged at 9.9 percent and 5.7 percent per annum, respectively.
The new interest rates will be applied during the second quarter of this year, from April 1 to June 30.
As per Circular 19, the State Bank of Vietnam requires the VAMC to review and adjust (reduce) the interest rates applied to the purchased NPLs in keeping with the repayment capacity of the borrowers, the interest rates prevalent in the market and based on the agreement with customers. Those interest rates will be publicised by the VAMC quarterly.
This is the fourth time the VAMC has announced an adjustment in interest rates applicable to the purchased NPLs.
The company had adjusted interest rates for the first time during the second quarter of 2014, when it decided to significantly cut interest rates on the bought NPLs in dong from 15 to 18 percent per year to only 10.7 percent per year.
During the third quarter of 2014, the VAMC kept interest rates on NPLs in dong unchanged, but slashed interest rates on debts denominated in the US dollar and the Euro.
In December 2014, the VAMC cut interest rates applicable in the first quarter of 2015 from 10.3 percent per year to 9.9 percent per year for NPLs denominated in the dong and 4.7 percent per year to 4.5 percent for NPLs in the US dollar, while keeping the rate for NPLs in the Euro unchanged at 5.7 percent per year.
The VAMC plans to buy NPLs worth 100 trillion VND (4.76 billion USD), or 2.5 percent of banks' total outstanding loans, this year.
Last year, the VAMC bought NPLs worth about 96 trillion VND (4.57 billion USD), raising the total bad debts it had purchased from credit institutions to 135 trillion VND (6.43 billion USD), or 3.4 percent of the total outstanding loans.
The new interest rates will be applied during the second quarter of this year, from April 1 to June 30.
As per Circular 19, the State Bank of Vietnam requires the VAMC to review and adjust (reduce) the interest rates applied to the purchased NPLs in keeping with the repayment capacity of the borrowers, the interest rates prevalent in the market and based on the agreement with customers. Those interest rates will be publicised by the VAMC quarterly.
This is the fourth time the VAMC has announced an adjustment in interest rates applicable to the purchased NPLs.
Photo for illustration
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During the third quarter of 2014, the VAMC kept interest rates on NPLs in dong unchanged, but slashed interest rates on debts denominated in the US dollar and the Euro.
In December 2014, the VAMC cut interest rates applicable in the first quarter of 2015 from 10.3 percent per year to 9.9 percent per year for NPLs denominated in the dong and 4.7 percent per year to 4.5 percent for NPLs in the US dollar, while keeping the rate for NPLs in the Euro unchanged at 5.7 percent per year.
The VAMC plans to buy NPLs worth 100 trillion VND (4.76 billion USD), or 2.5 percent of banks' total outstanding loans, this year.
Last year, the VAMC bought NPLs worth about 96 trillion VND (4.57 billion USD), raising the total bad debts it had purchased from credit institutions to 135 trillion VND (6.43 billion USD), or 3.4 percent of the total outstanding loans.
