Non-performing loans, if not sold, will be subject to inspection.

If credit institutions do not proactively sell their bad debts to the Vietnam Asset Management Company (VAMC), the State Bank of Vietnam will conduct an inspection.

Credit institutions with a non-performing loan ratio of 3% or more, or another non-performing loan ratio as stipulated by the State Bank of Vietnam (SBV), if they do not proactively sell their non-performing loans to the Vietnam Asset Management Company (VAMC), will be subject to inspection by the SBV, or will be required to hire an independent auditing firm to reassess the quality of their assets, equity, and charter capital.

This is one of the key points of the draft Decree on the organization and operation of VAMC, which the State Bank of Vietnam (SBV) discussed at a meeting with banks on January 25th in Hanoi. Based on inspections and independent audit results, the credit institution must sell its bad debts to VAMC to ensure that the bad debt ratio does not exceed 3%; and restructure them according to a plan approved by the SBV.

According to the draft Decree, the VAMC Management Board is expected to comprise 11 members, including 6 full-time members and 5 part-time members representing the Ministry of Justice, the Ministry of Finance, the Ministry of Construction, the Ministry of Natural Resources and Environment, and the State Bank of Vietnam.

The Supervisory Board of VAMC has 5 members. The Executive Board consists of a General Director and no more than 5 Deputy General Directors. VAMC has established branches in several provinces and centrally-administered cities.

According to (vov.vn) - LT