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| A state-owned credit institutions' asset management company has been established with a charter capital of 5 trillion VND. (Photo: VNA) |
Hanoi (VNA) – Vietnam has established a State-owned credit institutions' asset management company with a charter capital of 5 trillion VND (190 million USD) to tackle bad debts and support sustainable credit growth.
The Government issued Decree 359/2026/ND-CP on September 17 which sets out the establishment, organisation, operations and financial mechanism of the credit institutions' asset management company.
The company will be subject to the management, inspection and supervision of the State Bank of Vietnam (SBV) as a specialised enterprise wholly owned by the State.
It will operate on the principles of covering its costs through its revenues rather than seeking profit, ensuring transparency and openness in the purchase and resolution of bad debts, and minimising risks and costs in bad-debt resolution.
The company will buy non-performing loans from credit institutions and foreign bank branches, recover and dispose of debts and collateral, restructure loans and support lenders in resolving bad debts.
The purchase will be based on market value or in exchange for special bonds. It may also convert bad debts purchased through special bonds into loans acquired at market value.
Of note, borrowers whose bad debts have been sold to the company may continue to seek loans from credit institutions and foreign bank branches if they have viable production and business plans or investment projects, subject to agreement with lenders and applicable credit regulations.
The decree provides the legal framework for the company to operate as a specialised State-owned mechanism for dealing with non-performing loans while supporting the banking system's capacity to provide credit to viable borrowers./.
