Legalizing some regulations in Resolution 42/2017/QH14 on bad debt handling: Need to soon complete the national credit information system

Fundamentally solve the problem of bad debt

Legalizing the provisions in Resolution 42/2017/QH14 dated June 21, 2017 of the National Assembly on piloting bad debt settlement (NPL) of credit institutions is an important and necessary step to fundamentally resolve the problem of bad debt in Vietnam. By creating a more synchronous, stable and effective legal framework for NPL settlement and enforcement of collateral, especially restoring and perfecting the mechanism for seizing collateral, Vietnam can accelerate the progress of NPL settlement, release capital for the economy , minimize risks for the banking system and strengthen market confidence.

From international experience and practical implementation of Resolution 42/2017, it is possible to complete the legal framework on XLNX and TSBĐ enforcement with some specific contents as follows:

First, perfect the regulations on the right to seize collateral. Accordingly, legalizing the right to seize collateral of credit institutions and debt settlement organizations (DMOs) needs to be accompanied by detailed and transparent regulations on conditions, procedures, and implementation, including notification to the guarantor and related parties. It is necessary to clearly stipulate the cases in which seizure is allowed and measures to protect the rights of the guarantor during the seizure process, without violating the prohibitions of law and social ethics.

Next is to speed up the litigation and enforcement procedures. We need to legalize regulations allowing the application of simplified procedures in resolving disputes related to secured assets in court. At the same time, perfect the regulations related to the attachment and handling of secured assets in the civil enforcement process, with effective coordination between credit institutions and enforcement agencies.

We also need to thoroughly resolve the problems related to collateral as evidence and exhibits. Accordingly, legalize the provisions on the return of collateral as evidence in criminal cases or exhibits and means of administrative violations to credit institutions for handling, with clear conditions and procedures so as not to affect the process of resolving the case.

Along with increasing the rights of credit institutions, it is necessary to supplement and perfect the regulations on protecting investors, including the right to be fully informed, the right to negotiate debt restructuring, and support measures for investors facing real difficulties due to objective reasons. It is necessary to clearly distinguish bad debts due to objective and subjective faults in order to have appropriate responses. Review and amend related laws (Civil Code, Civil Enforcement Law, Land Law...) to have consistency and synchronization with the new regulations on debt restructuring in the Law on Credit Institutions.

Finally, it is necessary to improve the capacity and responsibility of the subjects. Credit institutions need to improve credit risk management, make loan and collateral information transparent, and have a mechanism to support customers in difficulty. People and businesses need to raise awareness and responsibility for borrowed capital. Authorities need to strengthen inter-sectoral coordination to resolve cases related to collateral quickly and effectively.

Prof. Dr. Vo Xuan Vinh

Raise awareness of responsibility in borrowing and repaying debt

To protect assets in the best, transparent and fair way, people and businesses need to raise their sense of responsibility in borrowing and repaying debts, and fully comply with the commitments in credit contracts.

Before borrowing money, you need to carefully study the terms, interest rates, fees and regulations related to collateral. During the borrowing process, you need to proactively monitor your financial situation, have a clear repayment plan and promptly notify the credit institution if you encounter difficulties in repaying the debt so that we can find a solution together.

On the part of the authorities, it is necessary to strengthen the management and supervision of the activities of credit institutions, and to comply with the law in lending and debt collection activities. At the same time, it is necessary to promote the dissemination andeducation of the law on bank credit to raise awareness. In particular, it is necessary to have an effective mechanism to inspect and supervise the implementation of regulations on the seizure and handling of collateral to prevent abuse of power by credit institutions.

Completing the national credit information system also plays an important role in helping credit institutions assess credit risks more accurately and people and businesses raise awareness of their credit history.

However, in order for the legalization of the provisions in Resolution 42 to be truly effective and sustainable, it is necessary to focus on developing detailed, transparent regulations that harmoniously balance the interests of credit institutions and investors, while strengthening coordination between state agencies and raising awareness and responsibility of all entities in the economy.

XLNX is not only the task of the banking industry but also the common responsibility of everyone and the business community, the people, towards the goal of building a healthy, transparent financial - credit system and actively contributing to the sustainable development of the country.

It is expected that on May 22, 2025, in Ho Chi Minh City, Vietnam Law Newspaper - Representative Office in Ho Chi Minh City will organize a seminar "It is necessary to continue to legalize a number of issues in the spirit of Resolution 42/2017/QH14 on bad debt settlement" with the participation of sponsorship from the Bank for Agriculture and Rural Development - Agribank , MCV Group Joint Stock Company, and Mobile Vietnam Technology Joint Stock Company.

The program is expected to have the participation of representatives of the State Bank, the Department of Civil Judgment Enforcement, the People's Procuracy - Ho Chi Minh City People's Court, a number of commercial banks and leading experts in the field. The program will provide useful information and be a forum for people, businesses, agencies and units to express their thoughts, aspirations, concerns and benefits when legalizing Resolution 42/2017.

Prof. Dr. Vo Xuan Vinh (Director of the Institute of Business Research, University of Economics, Ho Chi Minh City)

Source: https://baophapluat.vn/luat-hoa-mot-so-quy-dinh-trong-nghi-quyet-422017qh14-ve-xu-ly-no-xau-can-som-hoan-thien-he-thong-thong-tin-tin-dung-quoc-gia-post549137.html