Authorized by the Prime Minister, on the morning of May 20, Governor of the State Bank Nguyen Thi Hong presented to the National Assembly a summary of the Draft Law amending and supplementing a number of articles of the Law on Credit Institutions (CIs).

With the legalization of regulations in Resolution No. 42 on bad debt handling, credit institutions (including domestic credit institutions and foreign bank branches in Vietnam), debt purchase and sale companies, and organizations authorized to seize secured assets will have more authority in seizing secured assets of bad debts.

According to Governor Nguyen Thi Hong, bad debt in the credit institution system remains high and tends to increase, putting pressure on the banking sector.

Continuing to legalize the provisions in Resolution No. 42 aims to create a synchronous legal framework for bad debt handling, ensuring compliance with reality.

This helps to remove obstacles and difficulties that are preventing credit institutions and debt trading and handling organizations from exercising their legal rights in handling bad debts and secured assets, thereby contributing to improving the ability to rotate capital and improve access to credit at reasonable costs for people and businesses.

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Governor of the State Bank of Vietnam Nguyen Thi Hong. Photo: National Assembly

Regarding the right to seize collateral of bad debts, the draft adds regulations that the guarantor and the person holding collateral of bad debts are obliged to hand over the collateral along with legal documents and records to credit institutions, debt trading and settlement organizations for settlement according to the agreement in the security contract or in other documents and provisions of law.

If the guarantor or the asset holder fails to hand over the asset as prescribed, the credit institution or debt trading organization has the right to seize that asset.

At least 15 days before the date of seizure of real estate collateral, credit institutions and debt trading and settlement organizations must publicly disclose information on the time and place of seizure, the collateral to be seized, and the reason for seizure.

Information disclosure is carried out in the following forms: Posting information on one's website; sending written notices to the People's Committee of the commune level and the police agency of the commune level where the secured assets are located; notifying the guarantor and the person holding the secured assets (if any).

The People's Committee at the commune level and the police agency at the commune level where the secured assets are seized shall, within the scope of their functions, tasks and powers, ensure security, order and social safety during the process of seizing the secured assets.

In case the guarantor does not cooperate or is not present as notified by the credit institution, debt trading and settlement organization, the representative of the People's Committee of the commune where the asset seizure is conducted shall participate in witnessing and signing the minutes of seizure of the secured asset.

During the seizure process, credit institutions, debt trading and handling organizations, and organizations authorized to seize secured assets must not apply measures that violate prohibitions of law or are contrary to social ethics.

Regarding the provisions on the attachment of assets of the judgment debtor being used as collateral for bad debts, the attachment will be carried out in accordance with the provisions of the law on civil judgment enforcement in cases where the security contract has been signed and comes into effect after the time the judgment or decision of the Court comes into legal effect.

The draft also adds a provision that, after completing the procedure for determining evidence and finding that it does not affect the handling of the case and the execution of the judgment, the prosecuting agency shall return the evidence in the criminal case as collateral at the request of the secured party, which is a credit institution or debt trading or settlement organization.

The draft also amends and supplements the authority of the State Bank to decide on special loans.

Accordingly, the State Bank decided to grant special loans with and without collateral to credit institutions. The collateral for this special loan is determined by the State Bank, with a special loan interest rate of 0%/year.

Source: https://vietnamnet.vn/cam-su-dung-bien-phap-trai-dao-duc-xa-hoi-khi-thu-giu-tai-san-the-chap-2402822.html