Proposing the State Bank to have full authority to decide on special loans with 0% interest rate

Creating a solid legal corridor for bad debt handling

Governor of the State Bank of Vietnam Nguyen Thi Hong, authorized by the Prime Minister, presented the draft Law on amending and supplementing a number of articles of the Law on Credit Institutions: the development and submission of this draft Law is necessary in the context of bad debt tending to increase again, while a number of regulations in Resolution No. 42 will expire from January 1, 2026. The Government proposed to legalize 03 major policies of Resolution 42, including: The right to seize collateral of bad debt; Regulations on handling collateral that is evidence in criminal cases or exhibits, means of administrative violations; Regulations on handling collateral that has been seized and frozen to serve the enforcement of civil judgments.

In addition, the draft Law also amends and supplements many other important contents such as the authority to grant special loans, transitional provisions, asset seizure procedures and inter-sectoral coordination mechanisms in handling bad debts, specifically: Proposing to transfer the authority to decide on granting special loans with an interest rate of 0%/year and without collateral from the Prime Minister to the State Bank. Regulating the right to seize collateral in handling bad debts, ensuring that the seizure is not unilateral, must comply with the correct procedures, conditions and transparent processes. Regulations on the attachment of collateral being used to secure bad debts. Regulations on the return of collateral as evidence and exhibits after the investigation and administrative handling are terminated, ensuring that it does not affect the handling of the case.

Transitional provisions: Handling of special loan cases and seized assets before the Law comes into effect, to avoid creating legal gaps.

It is expected that if passed by the National Assembly, the Law will create a solid legal corridor for handling bad debts, improve the effectiveness of monetary policy management, contribute to stabilizing the macro economy and protecting the legitimate rights of people and businesses.

Strengthening the effectiveness of state management in the banking sector

Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai presented a report examining the draft Law, emphasizing the need to promulgate the law to ensure long-term stability in handling bad debts, while enhancing the effectiveness of state management in the banking sector.

Chairman of the Economic and Financial Committee Phan Van Mai

Some key contents in the review report: Regarding the legalization of 03 policies of Resolution 42: The majority of opinions agree with the Government's proposal. However, some opinions said that it is necessary to consider the scope of application, to avoid credit institutions taking advantage of the right to seize to loosen lending conditions, potentially posing legal risks.

Regarding the authority to grant special loans with 0% interest rate/year, without collateral: Approve the transfer of authority from the Prime Minister to the State Bank of Vietnam (SBV). Propose to clearly stipulate criteria, conditions, and procedures for lending; strengthen control and review the Law on Credit Institutions 2024 to avoid legal conflicts.

Regarding the right to seize collateral: Agree to add regulations on the right to seize collateral for bad debts. Propose to clarify the responsibilities of the People's Committee at the commune level and the Commune Police, the process of seizing and handling assets must be transparent, supervised and not affect the legitimate rights of the obligated party and related parties.

Regarding assets being seized for enforcement: Agree with the proposal but request further review of cases related to the rights of third parties (other than compensation and alimony). Suggest assigning the Government to clearly stipulate the coordination mechanism between the enforcement agency and the credit institution.

Regarding the return of collateral as evidence or evidence, means of administrative violation: Agree with the draft Law, but emphasize the need to avoid conflicts when the collateral has a value greater than the obligation or belongs to multiple guarantors.

The Economic and Financial Committee recommends continuing to review and complete the draft to be consistent with the Party's policies, ensuring constitutionality, legality, and consistency in the legal system. The regulations need to be carefully assessed for impact, ensuring transparency, feasibility, and humanity.

According to VOV

Source: https://baothanhhoa.vn/de-xuat-ngan-hang-nha-nuoc-toan-quyen-quyet-dinh-cho-vay-dac-biet-lai-suat-0-249435.htm