Clearly identify collateral and priority assets for payment in bankruptcy proceedings

The most difficult part of resolving bankruptcy procedures is the division of assets, especially in determining which assets are secured and which assets are prioritized for payment. Article 44 of the draft Law does not clearly define this concept, so it is necessary to add specific provisions to avoid confusion when applying. This is the opinion of National Assembly Delegate Le Tat Hieu (Phu Tho) on the draft Bankruptcy Law (amended) at the discussion session of Group 15 (including the National Assembly Delegation of Dak Lak and Phu Tho provinces) this morning, October 23.

There needs to be a roadmap for applying a differentiated fee system in Vietnam.

Commenting on the draft Law on Deposit Insurance (amended), National Assembly Deputy Thai Quynh Mai Dung ( Phu Tho ) highly appreciated the sense of responsibility and careful preparation of the drafting, appraisal and verification agencies. The draft Law dossier was carefully prepared, with reference and absorption of international experience, demonstrating the determination to perfect the legal framework on deposit insurance (DI) in the new period.

National Assembly Delegate Thai Quynh Mai Dung (Phu Tho) speaks. Photo: Xuan Quy

Having participated in the drafting of the Law on Deposit Insurance in 2012, the delegate completely agreed with the amendment policy to ensure compliance with the legal system, approach international practices and keep up with the development of the Vietnamese banking system.

Regarding the role of deposit insurance in the national financial safety net, delegates said that deposit insurance is an important component of the financial safety net, not only protecting depositors but also a measure to strengthen system confidence, helping to prevent mass withdrawals and limit the chain reaction when a credit institution encounters difficulties.

The delegate emphasized that effective coordination between the deposit insurance organization and agencies in the financial safety net such as the Central Bank, financial supervision agencies and the Ministry of Finance is crucial in preventing, responding to and handling banking crises, ensuring system safety. This requires a clear, specific and legally binding coordination mechanism between competent agencies, especially in information exchange, early warning and participation in handling weak credit institutions.

According to the 2024 survey of the International Association of Deposit Insurers, nearly three-quarters of deposit insurers have formal agreements in the form of Memorandums of Understanding (MoUs) in the financial safety net. Therefore, when the Law is promulgated, delegate Thai Quynh Mai Dung suggested that the State Bank strengthen coordination and data sharing so that the Vietnam Deposit Insurance can proactively assess risks, provide early warnings and effectively participate in handling banking crises.

Regarding deposit insurance fees, Clause 1, Article 19 of the Draft Law has given the authority to the Governor of the State Bank to flexibly apply deposit insurance fees of the same level or differentiate them in accordance with the characteristics of the credit and financial system in each period. This is a regulation consistent with the authority, functions and tasks of the State Bank. However, currently, there is a growing trend of deposit insurance organizations in the world applying a system of differentiated fees according to risk, so delegate Thai Quynh Mai Dung suggested that the State Bank needs to have a clear roadmap to gradually apply a system of differentiated fees in Vietnam, in accordance with international practices.

Regarding insurance payment (Article 22), delegates agreed with the regulation granting the authority to regulate the insurance payment limit in each period to the Governor of the State Bank in accordance with the policy of promoting decentralization and delegation of authority, as well as in accordance with the authority, functions and tasks of the State Bank. However, they suggested that the State Bank and the Vietnam Deposit Insurance increase the application of information technology in insurance payment activities to shorten payment time and better protect the legitimate rights of depositors.

National Assembly Delegate Tran Van Tien (Phu Tho) speaks. Photo: Xuan Quy

Giving further comments on the draft Law, National Assembly Deputy Tran Van Tien (Phu Tho) said that the provisions on the scope of regulation of the draft Law as such do not cover all the contents of the draft Law, such as: information and reporting activities; inspection; participation in handling Credit Institutions that are allowed early intervention... To ensure the scope of regulation of the draft Law, the delegate proposed to revise as follows: "This Law regulates deposit insurance activities; rights and obligations of deposit insured persons; deposit insurance participating organizations, deposit insurance organizations; information and reporting activities; inspection; participation in handling and state management of deposit insurance".

Concerns about the feasibility of recovery procedures when the enterprise is in a state of insolvency

Also in the group discussion program, giving comments on the draft Bankruptcy Law (amended), National Assembly Deputy Le Tat Hieu (Phu Tho) agreed with the policy of expanding the scope of regulation of the draft Law to supplement procedures for business recovery, in order to support insolvent enterprises that are still able to recover.

National Assembly Deputy Le Tat Hieu (Phu Tho) speaks. Photo: Xuan Quy

However, delegates expressed concerns: In fact, the Bankruptcy Law has been issued for a long time, but resolving business bankruptcies still faces many difficulties. The demand for bankruptcy is high, but the number of cases actually resolved is very small. When businesses become insolvent and have to file for bankruptcy, they often have to go through many steps of negotiation with creditors and related parties, but the current handling is still very complicated and prolonged.

The delegate raised the issue of the feasibility of the recovery procedure when the enterprise is in a state of insolvency, continuing to discuss with creditors about the recovery plan and then having to submit it to the Court for recognition is very difficult to implement in practice. According to him, the goal of bankruptcy is to handle loss-making enterprises, clearly identify the remaining assets so that creditors can recover and end the process.

The delegate emphasized that the most difficult part of resolving bankruptcy procedures is the division of assets, especially in determining which assets are secured and which assets are prioritized for payment. Article 44 of the draft does not clearly define this concept, so it is necessary to add specific provisions to avoid confusion when applying.

Overview of the meeting. Photo: Xuan Quy

Regarding the right to appeal of the People's Procuracy, delegate Hieu said: according to Clause 1, Article 111 of the current Bankruptcy Law, the People's Procuracy has the right to appeal the decision declaring an enterprise or cooperative bankrupt. However, Clause 3, Article 67 of the draft Law (amended) limits this right, only allowing appeal in cases where the decision causes serious damage to the rights and legitimate interests of a third party, or infringes upon public interests or State interests.

According to the delegate, such a regulation narrows the scope of appeal without a clear explanation, which is inappropriate. Therefore, he proposed to maintain the current regulation to ensure the appeal authority of the People's Procuracy, contributing to ensuring objectivity and fairness in the trial and bankruptcy declaration process.

Source: https://daibieunhandan.vn/xac-dinh-ro-tai-san-dam-bao-tai-san-uu-tien-thanh-toan-trong-giai-quyet-thu-tuc-pha-san-10392637.html