NA Agrees to Extend Bad Debt Settlement Pilot Resolution to End of 2023

VIETNAM, April 15 –

A view of the meeting. — Stock Photo baochinhphu.vn

HÀ NỘI — The Standing Committee of the National Assembly (NA) has agreed to extend a pilot resolution on settling bad debts until the end of 2023 instead of this year.

At a meeting on Thursday to consider a government report on the implementation of NA resolution 42/2017/QH14 on steering the settlement of bad debts of credit institutions, the committee agreed to extend the application of the resolution until December 31, 2023.

The NA approved Resolution 42 in 2017, which was due to expire on August 15 this year. Therefore, the government had proposed to the NA to extend the pilot resolution until August 15, 2024 before a new law on the matter is completed and ratified.

At the meeting, NA President Vương Đình Huệ agreed to the extension, but said the extension should only be until December 31, 2023, when NA Resolution 43/2022/QH15 on the economic stimulus plan will end.

Huệ noted that when extending the application of Resolution 42, the government should pay attention to the goals and solutions as well as streamlining guidance to ensure the proper and consistent implementation of the resolution.

In addition, he said, there was a need to strengthen coordination between relevant agencies and ensure that they assume their responsibilities in the implementation of the resolution.

NA Vice President Nguyễn Khắc Định suggested that the government make specific proposals and directions to streamline a legal system on bad debts and collateral settlement.

However, Định noted, the government should carefully consider whether a special policy, such as a law or resolution on the settlement of bad debts, is indispensable or just an urgent and temporary solution when the economy faces difficulties with excessive bad debts.

“Does there really need a separate Bad Debts and Collateral Settlement Act or should the government consider amending the Credit Institutions Act and include it in the law,” a- he asked.

During the meeting, authorized by the Prime Minister, the governor of the State Bank of Việt Nam Nguyễn Thị Hồng indicated that after five years of implementation of the resolution, the settlement of bad debts of credit institutions has obtained positive results.

Thus, the default rate of credit institutions was brought under control at less than 2%. Compared to August 15, 2017, when resolution began, total bad debt decreased by 17.21% at the end of last year. From August 15, 2017 to November 30, 2021, 373.3 trillion VNĐ of bad debts were collected in accordance with Resolution 42. On average, some 5.67 trillion VNĐ of bad debts were processed monthly during the application of resolution 42, against about 2 VNĐ. 14 trillion previously.

The government has therefore proposed to legislate the policies specified in Resolution 42 into a new law to permanently enable the banking industry to settle bad debts of credit institutions. The release of a new bad debt treatment law will help credit institutions maintain and speed up the treatment of bad debts to avoid potential risks to the economy, Hồng said. —VNS