The National Assembly Chairman requested clarification of bad debts arising from BOT projects, real estate, corporate bonds and banks.
This morning, under the chair of National Assembly Chairman Vuong Dinh Hue, the National Assembly Standing Committee opened its 10th session. This is a long session with many important contents to prepare for the 3rd Session of the National Assembly. Congress. The meeting program is expected to last 7.5 working days (from April 14 to April 26).
Speaking at the opening session, National Assembly Chairwoman Vuong Dinh Hue assessed that Resolution 42 has brought about many important changes in bad debt handling associated with credit institution restructuring. However, the National Assembly Chairman said that through preliminary research, the problems of Resolution 42 are mainly in the implementation stage.
He suggested the Government supplement the assessment of bad debts arising from the effective date of Resolution 42. In particular, it is necessary to carefully evaluate and consider the responsibilities of organizations and agencies related to arising bad debts, especially debts affected by Covid-19 and lending to BOT projects, real estate, and bonds of businesses and banks. Only then will we consider whether to extend Resolution 42 or not.
“This Resolution 42 cannot last forever, there is already a plan for the development of the Law on Bad Debt Handling, but why is it still protracted,” the National Assembly Chairman noted.
Proposal to extend the pilot period of bad debt settlement by 2 years
Also at the meeting, Governor of the State Bank of Vietnam Nguyen Thi Hong submitted a draft resolution on extending the time limit for application of all provisions of Resolution No. 42/2017/QH14 on piloting bad debt settlement. of credit institutions.
Specifically, the Governor of the State Bank Nguyen Thi Hong said that due to the impact of the Covid-19 epidemic, the debt repayment ability of borrowers declined, and bad debts of credit institutions were likely to continue to increase sharply in the coming years. next time. Therefore, continuing to create a legal corridor for the handling of bad debts is very necessary to open up capital sources and support the country’s economic development.
According to Ms. Hong’s explanation, Resolution 42 only lasts 5 years and will expire after August 15, 2022. When the enforcement expires, the entire mechanism on bad debt handling under this Resolution that is being implemented will be terminated, and the bad debt handling of credit institutions will comply with relevant laws. , are not given priority to apply a number of policies specified in the Resolution.
This will greatly affect the bad debt settlement process of credit institutions and the Vietnam Asset Management Company Limited (VAMC) as well as the organizational restructuring process. credit bureau. The mechanisms and policies to support bad debt handling that are not implemented will not encourage or mobilize domestic and foreign investors to participate in the restructuring of credit institutions.
The lack of incentive mechanisms and policies to support credit institutions and VAMC in handling bad debts and handling collateral will also prolong the bad debt settlement process. Bad debts being handled under Resolution No. 42/2017/NQ14 will be transferred to handling in accordance with relevant laws, which will make it difficult for credit institutions to continue handling such bad debts. easily lead to disputes between credit institutions and customers.
In addition, difficulties, problems, inadequacies, and legal conflicts between legal documents of the banking industry and other legal documents (especially related to the handling of collateral assets). of bad debts) if the pilot is not continued according to Resolution No. 42/2017/QH14, it will greatly affect the bad debt settlement process of the system of credit institutions, especially affecting the process of bad debt settlement. handle weak credit institutions.
The Governor also said that the Government proposes to the National Assembly to promulgate the Law on handling of bad debts of credit institutions on the basis of inheriting and completing the provisions of Resolution 42 in order to create a stable legal corridor. sustainable for the handling of bad debts of credit institutions.
As for the development of the Law on handling bad debts of credit institutions, it is necessary to comply with the order and procedures, take a long time, and is expected to be proposed to the National Assembly to include in the law-making program in 2023. Meanwhile, the Decree No. Decision 42 will expire after this August 15.
Therefore, in order to avoid creating a legal vacuum when Resolution No. 42 expires and when the Law on bad debt settlement of credit institutions has not been promulgated, the Government proposes to the National Assembly to extend the application period. using Resolution 42.
Regarding the proposal to maintain Resolution 42, Chairman of the Economic Committee Vu Hong Thanh said that the Government only proposed to extend the application period of all provisions of Resolution 42 by 2 years (until August 15, 2024). ) but did not suggest any adjustments or additions.
“The majority of opinions in the Standing Committee of the Economic Committee approved extending the application term of Resolution 42 for 2 years and proposed to consider amending and supplementing 2 contents,” said Chairman of the Economic Committee Vu Hong. Share bar.
That is additional to the scope of application, which are debts formed after August 15, 2017 and identified as bad debts during the effective time of the Resolution. At the same time, additional subjects to apply the bad debt handling mechanism in the Resolution is Vietnam Debt Trading Company (DATC), under the Ministry of Finance, similar to VAMC.
After hearing the verification report, the National Assembly Standing Committee will discuss the Government’s above proposal.
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