On September 17, 2018, the State Bank of Vietnam (SBV) issued Directive No. 05/CT-NHNN on continuing to accelerate the restructuring of credit institutions in association with NPL resolution.
After one year implementation of Resolution 42, Decision 1058, Directive 32 and Directive 06/CT-NHNN dated July 20, 2017, the banking sector has obtained a number of importantly initial results, creating a base for the next period. In order to continue to accelerate and implement effectively Resolution 42, Decision 1058 and other relevant documents, as well as implementing successfully the key objectives, tasks and measures of the banking industry in the coming time, the SBV Governor requires the SBV entities, VAMC and credit institutions to implement strictly the following tasks:
The Banking Supervision Agency is required to implement fully and promptly the Government’s and the SBV’s directions about the restructuring and NPL resolution; direct credit institutions and VAMC to implement strictly, synchronously and effectively the measures as stipulated in Decision 1058 and Resolution 42, in line with the set-out objectives, roadmap and plans;
Urgently finalize and submit to the SBV Governor for issuance the Circulars providing guidance for the implementation of Law No. 17/2017/QH14 dated November 20, 2017 amending and supplementing a number of articles of the Law on Credit Institutions, in order to create a legal and consistent framework for credit institutions to implement effectively Resolution 42 and Decision 1058; coordinate with the Department of Legal Affairs to review and make recommendations for the finalization of the legal framework for the restructuring of weak credit institutions, NPL resolution and collateral assets of NPLs;
Strengthen the inspection and supervision of Resolution 42, the scheme on restructuring credit institutions in association with dealing with bad debts for 2016-2020 period for the credit institutions and VAMC; enhance the supervision and direct credit institutions to implement strictly Directive No. 07/2017/CT-NHNN on strengthening the prevention and control of law violations in the monetary and banking fields, ensuring security, safe and sound banking operations, contributing to stabilizing the monetary and financial sector.
The Banking Supervision Agency is the leading entity to find out and analyze any difficulties and obstacles in the process of implementing Decision 1058 to promptly propose handling measures or submit to the competent levels for resolution; monitor and assess the results of implementing the action plans of the banking industry.
Moreover, the SBV Governor requires the SBV entities to proactively acquire and study the international and domestic situations for further improving the quality of the analysis, forecasting for the stability of the money market, the exchange rates, thereby contributing to stabilizing the macro-economy, controlling inflation, facilitating credit institutions to provide funds efficiently to the economy and performing well the tasks of restructuring and NPL resolution; continue to focus on the effective implementation, ensuring the progress and the quality of the tasks as assigned in Decision No. 1533/QD-NHNN promulgating the Action Plan of the banking sector in the process of implementing the Scheme on restructuring credit institutions in association with NPL resolution for 2016-2020 period.
The SBV Governor also requires VAMC to continue to implement the measures in Decision No. 28/QD-NHNN dated January 5, 2018 approving the Scheme on restructuring and improving the capacity of VAMC for 2017-2020 period and towards 2022; implement comprehensively and effectively the measures as stated in Resolution 42 to accelerate the process of resolving NPLs and collateral assets of NPLs which were purchased by VAMC; strengthen the tradings and resolution of NPLs in accordance with the market mechanism and in line with the laws and the approved plans, at the same time; conduct measures to minimize risks in buying and selling debts in the market prices.
VAMC is required to enhance coordination with credit institutions to review, classify and re-assess the collateral assets and the acquired NPLs to define the ability of debt recovery, then conduct appropriate measures; report promptly any difficulties and obstacles, and make recommendations to improve the efficiency of resolving, buying and selling NPLs; annually synthesize the results and measures of NPL resolution and make recommendations about the improvement of the legal framework for dealing with bad debts, collateral assets of NPLs.
The SBV Governor also requires the Chairpersons of the Boards of Directors/Members or General Directors of the credit institutions to supervise strictly the implementation of Resolution 42 and Decision 1058, accelerate the progress of resolving NPLs, collateral assets of NPLs, ensuring the targets of NPL resolution in accordance with the plans approved by the SBV; continue to implement effectively the substances and measures of restructuring and NPL resolution towards 2020 in line with the set-out roadmap.
Credit institutions are required to approve and/or implement urgently the plans of restructuring in association with NPL resolution; comply strictly with the regulations on interest rates and capital mobilization; continue to closely coordinate with VAMC to implement measures of NPL resolution.
The SBV Governor assigns the Communication Department to take lead in coordinating with the relevant entities to formulate and implement effectively the information and communication about Resolution 42 and Decision 1057; enhance communication to improve the understanding and confidence of the individuals, relevant divisions of credit institutions and customers in the measures of restructuring the CIs in association with NPL resolution.
Le Hang