Decree 53 amendment approved debt trading activities of...

Specifically, regarding debt trading activities, the State Bank of Vietnam (SBV) has proposed to amend Decree 53 to expand the scope of credit provision for customers with bad debts sold to VAMC, including customers with feasible investment projects. At the same time, it will add subjects selling bad debts to VAMC, abolish the requirement to approve each debt purchase plan and integrate it into VAMC's annual business plan.

Accordingly, the State Bank of Vietnam is seeking comments on the Draft Decree amending and supplementing a number of articles of Decree 53/2013/ND-CP dated May 18, 2013 of the Government on the establishment, organization and operation of the Vietnam Asset Management Company (VAMC).

VAMC debt trading floor (Photo: illustration)

According to current regulations in Decree 53, credit institutions can continue to consider and grant credit to customers with bad debts sold to VAMC if the customers have effective production and business plans, in accordance with the agreement and legal regulations.

In addition to the above two cases, Draft Decree 53 allows credit institutions or foreign bank branches to continue to provide credit to customers who have sold bad debts to VAMC if the customers have feasible investment projects. The provision of credit must comply with the provisions of law and the agreement between the parties.

Draft Decree 53 also expands the scope of VAMC’s bad debt buyers, including debts from foreign bank branches instead of only “credit institutions” as before. At the same time, it removes the requirement that VAMC’s Board of Members submit each debt purchase plan to the Governor of the State Bank for approval.

Law No. 69/2014/QH13 dated November 26, 2014 on management and use of state capital invested in production and business at enterprises stipulates the rights and responsibilities of the owner's representative agency for state-owned enterprises holding 100% of charter capital as "Approving the 5-year development investment strategy and plan and the annual production and business plan of the enterprise" (Point d, Clause 2, Article 42).

It should be noted that the plan to purchase debts of credit institutions and foreign bank branches at market value using capital sources other than special bonds is included in VAMC's annual business plan. (This is based on the functions, organization, tasks, and operating principles of VAMC as prescribed by law)

In addition, the Draft proposes to cancel the requirement for the State Bank to approve the plan to purchase debt at market prices and the plan to purchase debt with special bonds to reduce administrative procedures, facilitate the operation of VAMC, while still ensuring the management role of the State Bank as the representative agency of the State capital owner at VAMC.

According to the State Bank, this change will not create additional personnel or new costs because debt purchasing activities will be integrated into VAMC's annual business plan, which has been approved by the State Bank./.

Source: https://baodaknong.vn/nghi-dinh-53-sua-doi-duoc-thong-qua-hoat-dong-mua-ban-no-cua-vamc-se-co-nhieu-thay-doi-251867.html