Press Release on Circular 08/2016/TT-NHNN on trading and resolution of NPLs by VAMC

Press Release on Circular 08/2016/TT-NHNN on trading and resolution of NPLs by VAMC 

Governor of the State Bank of Vietnam (SBV) issued Circular No.08/2016/TT-NHNN on June 16 to revise several contents of Circular No.19/2013/TT-NHNN dated September 6, 2013 on trading and resolution of NPLs by the Vietnam Asset Management Company (VAMC).

Circular No.08/2016/TT-NHNN has been revised in line with the regulations of Degree No.18/2016/ND-CP dated March 18, 2016 of the Government on revising Decree No. 53/2013/ND-CP dated May 18, 2013 on establishment, organization and operations of the VAMC.

The main contents of Circular 08 are as follows:

To supplement the regulation on extension of special bond mature; the dossier and procedures for selling debt credit institutions to propose their request on extending mature of special bonds.

To revise the regulations on restructuring debts, selling NPLs by the VAMC in two cases: NPLs purchased with special bonds and NPLs purchased at the market price.

To supplement the provision on the case when credit institutions repurchase NPLs and the secured asset of these NPLs are used for other NPLs that are already sold to VAMC.

To supplement the provision on risk provisioning utilization for NPLs purchased at market price.

To supplement the regulations for credit institutions to resolve the difference between the selling price and book value of the principal outstanding of NPLs purchased by the VAMC at market price.

To supplement the provision on resolving those cases when special bonds have been settled but NPLs are still not fully recovered as negotiated in credit contract, trust contract and contract of corporate bond trading.

The Circular takes effect on August 1st, 2016.

The State Bank of Vietnam

Translated by Mai Huong