New legal framework needed for bad debt handling

Journalist Ha Anh Binh, Deputy Editor-in-Chief of Vietnam Law Newspaper, delivered the opening speech at the seminar. Photo: H.Pham

In his opening speech, journalist Ha Anh Binh, Deputy Editor-in-Chief of Vietnam Law Newspaper, said that Resolution 42/2017/QH14 dated June 21, 2017 of the National Assembly on piloting bad debt settlement of credit institutions was a major breakthrough in bad debt settlement activities in Vietnam. After more than 6 years of implementation, the resolution has brought about many positive results, contributing to unblocking capital flows, improving the efficiency of credit activities, and creating conditions to promote socio -economic development.

However, after Resolution 42 expires at the end of 2023, the system of credit institutions is facing many difficulties in handling bad debts due to the lack of a specific mechanism. Therefore, the urgent requirement now is to continue to legalize the core and effective contents of Resolution 42 to ensure continuity, stability and sustainability for the process of improving the financial and banking market.

Sharing information on the issue of bad debt settlement, Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam, Region 2, said that the results of the pilot implementation of bad debt settlement under Resolution 42 of the National Assembly have reflected the need to legalize some contents of the resolution to facilitate the process of bad debt settlement and improve the efficiency of credit activities, meeting the capital needs of the economy, with high requirements on growth rate.

Mr. Nguyen Duc Lenh, Deputy Director of State Bank Region 2 shared at the seminar. Photo: H.Pham

“It is necessary to legalize the seizure of collateral, create a favorable legal corridor, and reduce time and other costs for banks in recovering and handling bad debts. Issuing correct and accurate policies will become a resource to promote economic development,” Mr. Lenh emphasized.

According to Prof. Dr. Vo Xuan Vinh, Director of the Institute of Business Research - Ho Chi Minh City University of Economics, legalizing the effective regulations of Resolution 42 is a strategic and necessary step to create a solid, synchronous and stable legal framework for bad debt handling.

To protect assets in the best, transparent and fair way, Prof. Dr. Vo Xuan Vinh said that there should be an effective inspection and supervision mechanism for the implementation of regulations on seizure and handling of secured assets to prevent abuse of power by credit institutions.

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, stated that bad debt is the “blood clot” of the economy, greatly affecting businesses. He proposed legalizing the handling of bad debt in the Land Law and the Real Estate Business Law, while at the same time, ensuring the rights of mortgagees when legalizing Resolution 42. In addition, there should be a medium and long-term investment fund to support projects with the same term.

Source: https://hanoimoi.vn/can-khuon-kho-phap-ly-moi-cho-xu-ly-no-xau-703116.html