Only buy bad debts that meet all 5 conditions.

The Asset Management Company of Vietnamese Credit Institutions is a special enterprise wholly owned by the State.

The Prime Minister has just approved the plan to establish an Asset Management Company for Vietnamese credit institutions.

Accordingly, the Asset Management Company was established as a special tool of the State to contribute to the rapid resolution of bad debts, financial soundness, risk reduction for credit institutions and businesses, and to promote reasonable credit growth for the economy.

The company is a special enterprise wholly owned by the State (500 billion VND).

The Asset Management Company purchases non-performing loans from credit institutions at the book value of the outstanding principal balance of the borrowers, after deducting any specific provisions already set aside but not yet used for those non-performing loans, and pays the credit institution that sold the debt with special bonds.

When there is a need for capital, credit institutions can use special bonds to borrow refinancing funds from the State Bank of Vietnam. The State Bank of Vietnam determines the specific amount of refinancing loans relative to the face value of the special bonds and submits to the Prime Minister for decision the interest rate for refinancing loans based on special bonds in each period.

Based on financial capacity, economic efficiency, and market conditions, the Asset Management Company purchases non-performing loans from credit institutions at market value using non-special bond funds, based on agreements and reassessed non-performing loan values ​​that meet the following conditions: assessed as having the potential to fully recover the purchase price; collateral assets of the non-performing loan are marketable; and the borrower has prospects for recovering their ability to repay the debt...

In the case of purchasing non-performing loans at market price, the Asset Management Company reassesses the value of the non-performing loan based on the recoverability of the principal and the collateral securing the loan.

Non-performing loans of credit institutions purchased by the Asset Management Company must meet 5 conditions:

Non-performing loans (in VND or foreign currency) of Vietnamese credit institutions, including non-performing loans in credit granting activities, corporate bond purchases, entrusted corporate bond purchases, entrusted credit granting, and other activities as prescribed by the State Bank of Vietnam.

Regarding non-performing loans secured by assets, the focus should first be on resolving non-performing loans secured by real estate, including real estate collateral that will be created in the future.

For non-performing loans, the collateral must be legal and have valid documentation.
The borrowers still exist.

The outstanding balance of non-performing loans or bad debts of borrowers must not be lower than the level stipulated by the State Bank of Vietnam.

The Prime Minister has decided that the Asset Management Company may purchase non-performing loans from credit institutions that do not fully meet the above-mentioned conditions.

According to (vov.vn) - LT