Submit to the National Assembly the law on the right to seize secured assets

On the morning of May 20, at the 9th Session of the 15th National Assembly, Governor of the State Bank of Vietnam Nguyen Thi Hong, authorized by the Prime Minister, presented the Proposal on the draft Law amending and supplementing a number of articles of the Law on Credit Institutions.

Ensuring a long-term, stable legal basis to increase the effectiveness of bad debt handling

In this draft amended Law, the Government proposes to legalize 3 groups of policies in Resolution 42/2017/QH14, including regulations on: the right to seize secured assets; attachment of secured assets of the party subject to enforcement; return of secured assets as evidence in criminal cases.

Governor Nguyen Thi Hong said that currently, bad debt in the credit system continues to be high and has an increasing trend, which is putting pressure on the banking sector, especially in the context of the Government setting a growth target of at least 8% this year, and a double-digit growth target in the following years.

Governor of the State Bank of Vietnam Nguyen Thi Hong. (Photo: BUI GIANG)

The legalization of the provisions of Resolution No. 42/2017/QH14 aims to ensure a long-term and stable legal basis to increase the effectiveness of bad debt handling, enhance access to credit for businesses and people, thereby creating momentum for socio -economic development.

The Draft Law clearly states that credit institutions and debt trading and handling organizations have the right to seize secured assets. The seizure of secured assets can only be carried out in cases where the security contract has an agreement that the guarantor agrees to allow the secured party to seize the secured assets of the bad debt when the secured assets must be handled according to the provisions of law.

The seizure of secured assets is not a unilateral, unconditional seizure but must comply with the scope, limits, and conditions of seizure, ensuring fairness, publicity, transparency, and ensuring the legitimate rights and interests of the obligated party, credit institutions, and related parties.

Also according to the draft, during the confiscation process, credit institutions are not allowed to apply measures that violate the prohibitions of the law or social ethics; credit institutions are only authorized to confiscate to debt management companies and exploit the assets of that credit institution; debt trading and handling organizations are only authorized to confiscate to debt-selling credit institutions, debt management companies and exploit the assets of debt-selling credit institutions...

At the same time, credit institutions and debt trading and settlement organizations must develop and promulgate internal regulations on the implementation of collateral seizure, including regulations when authorizing collateral seizure.

View of the meeting in the hall on the morning of May 20. (Photo: BUI GIANG)

Examining this content, the Economic and Financial Committee believes that legalizing the right to seize collateral assets of bad debts is necessary, but recommends reviewing and ensuring strict regulations on the 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.

The examining agency proposed that the Government specify in detail the procedures for seizing secured assets and handling secured assets after seizure, ensuring publicity, transparency, compliance with legal provisions, and ensuring the rights and legitimate interests of the person whose secured assets are seized and related parties.

State Bank decentralization is "determined" to grant special loans

The draft Law on Credit Institutions (amended) stipulates: “The State Bank shall decide to grant special loans with or without collateral to credit institutions. The collateral for special loans from the State Bank shall be as prescribed by the Governor of the State Bank. The interest rate for special loans from the State Bank shall be 0%/year.”

Thus, the draft Law has transferred the decision-making authority from the Prime Minister (in the case of special loans with 0% interest rate/year, special loans without collateral) to the State Bank.

According to Governor Nguyen Thi Hong, this regulation not only thoroughly decentralizes and delegates power but also reduces intermediaries, contributing to shortening processing time, ensuring timely implementation, security and safety of the credit institution system.

Chairman of the Economic and Financial Committee Phan Van Mai. (Photo: BUI GIANG)

The Economic and Financial Committee agreed to adjust the authority to decide on special lending for loans with an interest rate of 0%/year and loans without collateral from the Prime Minister to the State Bank of Vietnam, in order to link the decision on special lending with the responsibility of inspection and supervision of credit institutions and monetary policy management of the State Bank.

The review 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 unsecured loans; clearly and transparently stipulate lending procedures and processes and take measures to strengthen control, prevent and limit possible losses.

At the same time, review the provisions of the Law on Credit Institutions 2024 related to the authority to decide on special loans to amend and supplement the decentralization of authority to the State Bank accordingly, avoiding problems in implementation.

Source: https://baotuyenquang.com.vn/trinh-quoc-hoi-luat-hoa-quyen-thu-giu-tai-san-bao-dam-212180.html