The Government submits to the National Assembly to extend the pilot of bad debt settlement of credit institutions
Continuing the third session, on the morning of May 24, the National Assembly listened to the Governor of the State Bank Nguyen Thi Hong, authorized by the Prime Minister, to propose an extension of the time limit for application of all provisions of Resolution No. 42/2017/QH14 on pilot bad debt settlement of credit institutions.
Governor of the State Bank Nguyen Thi Hong
According to the Government’s report, after nearly 5 years of being put into practice, the provisions of Resolution No. 42/2017/QH14 have created the necessary legal corridor for the handling of bad debts of credit institutions. banks, branches of foreign banks (CIs), one member limited liability company for asset management of Vietnamese credit institutions (hereinafter referred to as VAMC).
The implementation of Resolution No. 42/2017/QH14 has brought about positive changes in bad debt settlement, significantly contributing to the results of restructuring the system of credit institutions associated with bad debt settlement in the period. period 2016-2020. But Resolution No. 42/2017/QH14 lasts only 5 years and will expire after August 15, 2022.
When the enforcement expires, the entire mechanism on bad debt handling under Resolution No. 42/2017/QH14 that is being implemented will end, and the bad debt settlement of credit institutions will comply with applicable laws. related policies, some policies are not prioritized in Resolution No. 42/2017/QH14.
According to Governor Nguyen Thi Hong, 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 that are being handled under Resolution No. 42/2017/NQ14 will be transferred to be handled in accordance with relevant laws, which will cause difficulties for credit institutions to continue handling such bad debts, easily leading to the arising of 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 handling credit institutions. bad.
Therefore, it is necessary to continue maintaining effective policies that Resolution No. 42/2017/QH14 brings in order to speed up the resolution of bad debts and avoid disputes arising in practice.
From the above necessity, the Government proposes the National Assembly to approve the extension of the time limit for application of all provisions of Resolution No. 42/2017/QH14 to December 31, 2023; include this content in the joint resolution of the 3rd session, the 15th National Assembly.
The Government also proposed the National Assembly to assign the Government to direct the State Bank of Vietnam to assume the prime responsibility for, and coordinate with the Supreme People’s Procuracy, Supreme People’s Court, relevant ministries and branches in studying and proposing proposals. Promulgate regulations on bad debt settlement together with the review and finalization of the Law on Credit Institutions and other laws related to bad debt settlement and collateral, and submit it to the National Assembly no later than 0 session. early 2023.
In the final report on the implementation of Resolution 42, the Government also updated the reported data. Accordingly, the total bad debt determined according to Resolution No. 42 as of August 15, 2017 is 541.6 trillion VND. Bad debt determined under Resolution No. 42 newly arising during the Resolution’s effective date to December 31, 2021 is VND 251.3 trillion. Bad debt determined under Resolution No. 42 that has not been resolved by December 31, 2021 is VND 412.67 trillion.
According to the meeting agenda, on the morning of May 25, the National Assembly will discuss in the group the summary of the implementation of Resolution No. 42/2017/QH14 dated June 21, 2017 on piloting bad debt settlement of organizations. credit and the extension of the time limit for the application of all provisions of this Resolution.
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