Press release on issuance of Circular No. 03/2024/TT-NHNN
Hanoi, May 16, 2024 – The Governor of the State Bank of Vietnam (SBV) has issued Circular No. 03/2024/TT-NHNN amending and supplementing a number of Articles of Circular No.19/2013/TT-NHNN dated September 6, 2013 stipulating the purchase, sale and handling of non-performing loans (NPLs) by Vietnam Asset Management Company (VAMC).
The new Circular is composed of 4 Articles, specifically as follows:
1. Article 1: comprising of 14 Paragraphs amending and supplementing a number of Paragraphs of Circular No.19/2013/TT-NHNN, specifically as follows:
(i) Supplementing the subjects of application for the purchase of NPLs, to include wholly foreign-owned credit institutions, joint venture credit institutions, and foreign bank branches.
(ii) Amending and supplementing the definition of NPLs in accordance with the 2024 Law on Credit Institutions, and abolishing the provisions on NPLs as stipulated in Resolution No. 42/2017/QH14 dated June 21, 2017 on the pilot resolution of NPLs at the credit institutions, due to the termination of the effectiveness of Resolution No. 42/2017/QH14.
(iii) Supplementing one additional principle of purchasing NPLs: wholly foreign-owned credit institutions, joint venture credit institutions and foreign bank branches can only purchase NPLs at the market value.
(iv) Modifying the phrase of "organizations with independent valuation functions" into "price appraising enterprises" to ensure alignment with the Law on Prices;
(v) Modifying the Vietnamese term “tái cơ cấu” into “cơ cấu lại” (both mean "restructuring") to ensure alignment with the 2024 Law on Credit Institutions;
(vi) Supplementing provisions allowing VAMC to convert NPLs purchased by special bonds into NPLs purchased at the market price for all NPLs purchased by VAMC in accordance with Article 197 of the 2024 Law on Credit Institutions;
(vii) Supplementing regulations on the re-distribution of the remaining value of the amount of money recovered from the NPLs purchased at the market price in accordance with Paragraph 3 of Article 197 of the 2024 Law on Credit Institutions;
(viii) Supplementing the principle of selling purchased NPLs to ensure alignment with Articles 196 -197 of the 2024 Law on Credit Institutions;
(ix) Supplementing regulations on the sale of collaterals and NPLs to ensure alignment with Article 196 of the 2024 Law on Credit Institutions;
(x) Supplementing provisions on the responsibilities of VAMC, the credit institutions and the foreign bank branches in publicizing information on NPLs and the collaterals for the NPLs;
(xi) Amending and supplementing regulations on the time and frequency for VAMC to re-evaluate the collateral for each debt, and to determine the amount of money used for risk provisioning as recommended by the State Audit of Vietnam.
2. Article 2: Replacing, abolishing a number of phrases, Points, Paragraphs and Articles of Circular No.19/2013/TT-NHNN.
3. Article 3: Responsibilities for the implementation.
4. Article 4. Enforcement.
This Circular takes effect from July 1, 2024.