Proposal for the State Bank to decide on special loans of 0%, no collateral

Continuing the program of the 9th Session, on the morning of May 20, Governor of the State Bank Nguyen Thi Hong presented to the National Assembly a draft Law amending and supplementing a number of articles of the Law on Credit Institutions.

Governor of the State Bank Nguyen Thi Hong. (Photo: quochoi.vn)

Ms. Nguyen Thi Hong said that the authority to decide on special loans with interest rates of 0%/year and unsecured loans is currently the Prime Minister .

However, in this amendment to the Law on Credit Institutions, the Government proposed to add the authority to decide on special loans of the State Bank.

Accordingly, the draft Law stipulates that the State Bank is allowed to decide on special loans with or without collateral to credit institutions. The collateral for special loans from the State Bank is as prescribed by the Governor of the State Bank. The interest rate for special loans from the State Bank is 0%/year.

Credit institutions are allowed to borrow specially from the State Bank and other credit institutions in the following cases: paying deposits to depositors when there is a mass withdrawal; implementing a recovery plan or a compulsory transfer plan.

In the submission, the Government stated that the transfer of authority from the Prime Minister to the State Bank aims to thoroughly decentralize and reduce intermediaries; thereby, shortening processing time, ensuring timely implementation, security and safety of the credit institution system.

Examining this content, Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai said that the Committee agreed to adjust the authority to decide on special loans with 0% interest rate/year and unsecured loans from the Prime Minister to the State Bank of Vietnam.

However, the appraisal agency proposed to review current regulations on special loans; study and specify detailed criteria and conditions for special loans with 0% interest rate/year and loans without collateral.

According to Mr. Phan Van Mai, it is necessary to clearly and transparently regulate the lending procedures and have measures to strengthen control, prevent and limit possible losses.

The Economic and Financial Committee also proposed to review the provisions of the Law on Credit Institutions 2024 related to the authority to decide on special loans to amend and supplement them in accordance with the decentralization of authority to the State Bank, avoiding problems in implementation.

Strict regulations on conditions for seizing collateral for bad debt

The draft Law amending and supplementing a number of articles of the Law on Credit Institutions also mentions new points related to the addition of regulations that credit institutions and debt trading and settlement organizations have the right to seize secured assets.

The seizure of secured assets shall only be carried out when the security contract has an agreement that the guarantor agrees to allow the secured party the right to seize the secured assets of the bad debt when the secured assets must be handled.

The seizure of secured assets is not unilateral and unconditional, but must comply with the scope, limits and conditions prescribed by law.

To avoid abuse of the right to seize secured assets, the draft law clearly stipulates that during the seizure process, credit institutions are not allowed to apply measures that violate the prohibitions of the law or are contrary to social ethics.

A credit institution is only authorized to seize to the debt management company and exploit the assets of that credit institution. A debt trading and handling organization is only authorized to seize to the debt selling credit institution, the debt management company and exploit the assets of the debt selling credit institution.

The draft law also stipulates that the credit institution that is subject to compulsory transfer is authorized to seize the secured assets for the credit institution receiving the compulsory transfer or the debt management and asset exploitation company of the credit institution receiving the compulsory transfer.

According to the assessment of the Economic and Financial Committee, it is necessary to supplement regulations on the right to seize collateral of bad debts.

The examining agency proposed to review and ensure strict regulations on conditions for exercising the right to seize collateral assets of bad debts; the role and responsibility of the People's Committee at the commune level and the police at the commune level in ensuring security, order and social safety during the process of seizing collateral assets; and the authorization to seize collateral assets.

In addition, the Economic and Financial Committee proposed that the draft Law supplement the provision assigning the Government to specify the order and procedures for seizing secured assets and handling secured assets after seizure. This is to ensure publicity, transparency, and ensure the rights and legitimate interests of the person whose secured assets are seized and related parties.

English

Source: https://vtcnews.vn/de-xuat-ngan-hang-nha-nuoc-duoc-quyet-cho-vay-dac-biet-0-khong-tai-san-dam-bao-ar944154.html