SBV Governor vows to speed up settlement of weak banks, bad debts

15:04 | 05/11/2018 Economy

Governor of the State Bank of Vietnam (SBV) Le Minh Hung was questioned on the pace of handling bad debt and banks with bad performances during the question-and-answer session on November 1 at the 14th National Assembly’s sixth session.

State Bank of Vietnam Governor Le Minh Hung - Photo: VGP

Answering a query by Deputy Nguyen Thi Yen from southern Ba Ria-Vung Tau province about the ineffective and asynchronous implementation of the NA’s Resolution No. 42 on settling bad debt, Hung said that the implementation duration of the resolution is just over one year, as it took effect on August 15, 2017.

According to Hung, the resolution has been carried out drastically over the past year, producing initial positive results.

He cited reports at a conference held by the SBV in late September this year which said that credit institutions handled VND140 trillion (US$6 billion) worth of bad debts, and the Vietnam Asset Management Company handled about VND95 trillion (US$4 billion) of the debts it had bought.

He added that the SBV has sent detailed reports to the Government and Prime Minister on the shortcomings and difficulties facing ministries and localities during the implementation of the resolutions.

The SBV then will coordinate with the Ministries of Finance and Justice, localities and People’s Courts at all levels to take more drastic measures so as to effectively tackle shortcomings in the coordination between offices in the work.

The Governor said he believes the settlement of bad debt will gather pace in the time ahead.

Regarding weak banks, the head of the central bank said that under the Law on amendments and supplements to several articles of the Law on Credit Organisation that became effective on January 15, 2018, the SBV had reported the situation of the banks to the Government and authorised agencies. The Government had approved policies and directions to address the issue.

However, the process remains slow, as the SBV is assessing those banks and holding final negotiations with investors, which are time consuming, Hung stated.

Based on investors’ commitments and the Government’s orientations, the central bank will complete a plan on the restructuring of banks with bad performances and report it to the Government and Prime Minister.