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THE STATE BANK
OF VIETNAM
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THE SOCIALIST
REPUBLIC OF VIET NAM
Independence-Freedom-Happiness
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No.
03/2024/TT-NHNN
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Hanoi, May 16,
2024
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CIRCULAR
AMENDMENTS
TO SOME ARTICLES OF CIRCULAR NO. 19/2013/TT-NHNN DATED SEPTEMBER 06, 2013 OF
GOVERNOR OF STATE BANK OF VIETNAM ON PURCHASE, SALE AND SETTLEMENT OF BAD DEBTS
OF VIETNAM ASSET MANAGEMENT COMPANY
Pursuant to the Law on the State Bank of Vietnam
dated June 16, 2010;
Pursuant to the Law on Credit Institutions dated
January 18, 2024;
Pursuant to the Law on Enterprises dated
November 26, 2020;
Pursuant to the Government's Decree No.
102/2022/ND-CP dated December 12, 2022 prescribing functions, tasks, powers and
organizational structure of the State Bank of Vietnam;
Pursuant to the Government’s Decree No.
53/2013/ND-CP dated May 18, 2013 on the establishment, organization and
operation of Vietnam Asset Management Company; the Government’s Decree No.
34/2015/ND-CP dated March 31, 2015 providing amendments to the Government’s
Decree No. 53/2013/ND-CP; the Government's Decree No. 18/2016/ND-CP dated March
18, 2016 providing amendments to the Government’s Decree No. 53/2013/ND-CP;
At the request of the Head of the SBV Banking
Supervision Agency;
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Article 1. Amendments to some
Articles of Circular No. 19/2013/TT-NHNN dated September 06, 2013 of the
Governor of the State Bank of Vietnam on purchase, sale and settlement of bad
debts of VAMC (hereinafter referred to as the “Circular No. 19/2013/TT-NHNN”)
1. Clause 2 Article 2 is amended as follows:
“2. Credit institutions and foreign bank
branches (FBBs).”.
2. Clause 1a is added to Article 3 and Clauses 6,
7a Article 3 are amended as follows:
a) Clause 1a is added following Clause 1 as
follows:
“1a. Vietnamese credit institution means
a credit institution that is duly established and operating in accordance with
regulations of the Law on Credit Institutions, except wholly foreign-owned
credit institutions and joint-venture credit institutions.”
b) Clause 6 is amended as follows:
“6. Book value of outstanding principal of
a bad debt at a credit institution or FBB means the outstanding principal
amount of the bad debt recorded on the balance sheet of that credit institution
or FBB; the book value of outstanding principal of a bad debt at VAMC is the
purchase price or the outstanding principal amount of the bad debt recorded on
the balance sheet of VAMC.”.
c) Clause 7a (as amended in Clause 2 Article 1 of
the Circular No. 09/2017/TT-NHNN) is amended as follows:
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a) Bad debts of a credit institution or FBB include
bad debts recorded on its balance sheet according to regulations on
classification of assets adopted by the Governor of the State Bank of Vietnam,
and bad debts which have been settled using risk provisions but have not been
recovered and recorded as off-balance sheet items;
b) Bad debts which have been purchased from credit
institutions and FBBs by VAMC but have not been recovered.”.
3. Clause 5 is added to Article 8 as follows:
“5. VAMC may only purchase bad debts from
joint-venture credit institutions, wholly foreign-owned credit institutions or
FBBs at market prices.”.
4. Article 9 is amended as follows:
“A borrower whose bad debt has been sold to
VAMC and whose business plan or investment project is assessed efficient shall
be eligible to get loans granted by credit institutions or FBB under specific
agreement and in accordance with regulations of law.”.
5. Article 23 is amended as follows:
“Article 23. Conditions for bad debts to
be purchased by VAMC at market prices
A bad debt may be purchased by VAMC at the market
price if:
1. It meets the conditions set out in Clause 1 Article 16 of this Circular.
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3. The collateral for the bad debt is liquid or the
borrower has the possibility of recovering their solvency.
4. Where a bad debt purchased with special bonds is
converted into a bad debt purchased at the market price, the special bonds
corresponding to such bad debt must be immature and not blocked by the State
Bank of Vietnam.”.
6. Article 26 is amended as follows:
“Article 26. Purchasing bad debts at
market prices
1. Based on the plan for purchase of bad debts at
market prices approved by the State Bank of Vietnam, financial capacity,
economic efficiency and market developments, VAMC shall decide to purchase bad
debts at market prices and assume responsibility for its decision.
2. VAMC may only purchase the bad debts prescribed
in Point a Clause 7a Article 3 of this Circular at market prices after the
following tasks have been fulfilled:
a) Determining whether the bad debt meets the
conditions in Clauses 1, 2, 3 Article 23 of this Circular;
b) Determining the market price of the bad debt,
including the collateral for that bad debt. VAMC must itself carry out
valuation of the bad debt and its collateral or hire a qualified valuation firm
to do so;
c) Assessing economic efficiency, risks and
probability of investment recovery;
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dd) Drawing up feasible plans for settling debts
and their collateral.
3. When converting a bad debt purchased with
special bonds into a bad debt purchased at the market price, VAMC must fulfill the
tasks in Clauses 2, 3 Article 23 of this Circular, reach agreements on the
purchase price of the bad debt at the market price with a Vietnamese credit
institution, enter into debt purchase contract, and perform the following
tasks:
a) VAMC shall receive the special bonds from the
Vietnamese credit institution and finalize such special bonds and the
outstanding principal amount of the bad debt recorded on the balance sheet;
transfer an amount of the collected debt to the Vietnamese credit institution as
prescribed, the stake/shares in the borrower according to the book value
recorded on the balance sheet in case part of the bad debt is converted into
charter capital or share capital of the borrower (if any). VAMC shall transfer
all rights and obligations associated with the stake/shares in the borrower to
the Vietnamese credit institution;
b) VAMC shall make payment of the purchase price of
the bad debt to the Vietnamese credit institution under terms and conditions of
the contract for purchase of bad debts at market price;
c) The Vietnamese credit institution shall return
special bonds to VAMC and receive the selling price of the bad debt which is
sold at the market price, the stake/shares in the borrower, and an amount of
the collected debt as prescribed in Points a, b of this Clause, and fulfill the
following tasks:
(i) If the sum of the selling price of the
bad debt, an amount of the collected debt and value of the stake/shares
received from VAMC is higher than the face value of special bonds, the Vietnamese
credit institution shall record the difference as its income in the fiscal
year;
(ii) If the sum of the selling price of the
bad debt, an amount of the collected debt and value of the stake/shares
received from VAMC is lower than the face value of special bonds, the
Vietnamese credit institution shall use the risk provision which is set aside
against special bonds to cover the difference. If the risk provision is not
sufficient to fully cover the difference, the remaining amount shall be
recorded as business expenses in the period.
d) The Vietnamese credit institution shall reserve
the provision for special bonds that remains after fulfilling the tasks in
points c(i), c(ii) of this clause.
4. The sale of a bad debt at the market price must
be made in a written contract in conformity with provisions of this Circular
and relevant laws. In case a bad debt purchased with special bonds is converted
into a bad debt purchased at the market price as prescribed in Clause 3 of this
Article, the contract for purchase of bad debt with special bonds shall cease
to have effect from the date of entry into force of the contract for purchase
of bad debt at market price. VAMC may reach an agreement with the credit
institution or FBB on distribution of the remaining value of the collected
amount of the bad debt after deducting the purchasing price and relevant costs.
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7. Clause 6 is added to Article 34 (as amended in
Clause 6 Article 1 of the Circular No. 09/2017/TT-NHNN) as follows:
“6. VAMC may sell bad debts to juridical
persons or individuals at the selling price which is either higher or lower
than the outstanding principal of the bad debt.”.
8. Point c Clause 2 Article 36 (as amended in
Clause 10 Article 1 of the Circular No. 32/2019/TT-NHNN) is amended as follows:
“c) The debt-selling credit institution is a
commercial bank that meets the following requirements:
(i) It is allowed to contribute capital and
purchase shares according to its establishment and operation license;
(ii) It maintains the minimum capital
adequacy ratio as prescribed in Point b Clause 1 Article 138 of the Law on
Credit Institutions, and the limits on capital contribution/share purchase as
prescribed in Article 137 of the Law on Credit Institutions, and ensures that
the actual value of its charter capital is not lower than the legal capital
(the stake/share capital converted from bad debts purchased with special bonds
must be taken into accounts when calculating the ratio/value of the charter
capital as mentioned above) at the time of obtaining the document specified in
Point b of this Clause;
(iii) It earns profits as shown in its
financial statements, which have been audited by an independent audit
organization, of the year preceding the year in which it obtains the document
specified in Point b of this Clause;
(iv) It did not incur any penalties for
administrative violations against debt classification, setting aside and use of
provisions for risks, capital contribution and share purchase within the
consecutive period of 12 months preceding the month in which it obtains the
document specified in Point b of this Clause;
(v) Its organizational structure, Board of
Directors, Board of Members, Control Board, and General Director (Director)
conform to regulations of the Law on Credit Institutions and SBV’s
regulations.”.
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“5. VAMC may sell the collateral for a bad
debt at the selling price which is either higher or lower than the outstanding
principal of such bad debt.”.
10. Point g is added to Clause 1 Article 41:
“g. Post and publish information on bad debts
purchased on VAMC - Loan Transaction Platform and website of VAMC and their
collateral. Posting and publishing of information must comply with regulations
of law on protection of personal data.”.
11. Clause 7 Article 46 is amended as follows:
“7. Removal of debts for which risks have
been controlled as prescribed in Clause 6 of this Article from the balance
sheet shall comply with SBV’s regulations on classification of assets, and the
Government’s regulations on ratio and method of establishment of provisions for
risks, and utilization of provisions for handling risks by credit institutions
and FBBs.”.
12. Clauses 1 and 2 Article 47a (as amended in
Clause 33 Article 1 of the Circular No. 14/2015/TT-NHNN) are amended as
follows:
“1. VAMC shall establish provision for each
bad debt purchased at the market price (R) using the following formula:
R = (A-C) x r
Where:
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b) R will be 0 if C > A.
c) If a piece of property is put up as collateral
for multiple bad debts, VAMC shall determine the ratio of collateral for each bad
debt. C equals (=) deducted value of collateral multiplied by (x) ratio of
collateral for the bad debt.
2. By December 31 every year, VAMC shall carry out
re-valuation of the collateral for each bad debt, determine the annual
provision for each bad debt according to Clause 1 of this Article, and perform
the following tasks:
a) If the necessary annual provision is smaller
than the actual provision, VAMC may reverse the difference.
b) If the necessary annual provision is higher than
the actual provision, VAMC shall make additional provision.”.
13. Point g is added to Clause 4 Article 50 (as
amended in Clause 37 Article 1 of the Circular No. 14/2015/TT-NHNN and Clause
19 Article 1 of the Circular No. 32/2019/TT-NHNN) as follows:
“g. Cooperate with VAMC in fulfilling the
tasks in Point g Clause 1 Article 41 of this Circular.”.
14. Article 54 is amended as follows:
“Article 54. Implementation organization
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Article 2. Replacement and
abrogation of some phrases, Points, Clauses and Articles of Circular No.
19/2013/TT-NHNN (as amended by the Circular No. 14/2015/TT-NHNN, the Circular
No. 08/2016/TT-NHNN, the Circular No. 09/2017/TT-NHNN and the Circular No.
32/2019/TT-NHNN)
1. The phrase “tổ chức tín dụng” (“credit
institutions”) is replaced with the phrase “tổ chức tín dụng, chi nhánh ngân
hàng nước ngoài” (“credit institutions and FBBs”) in heading of Chapter II;
Article 1; Clause 5 Article 2; Clauses 1, 7, 8a Article 3; Clauses 1, 4 Article
4a; Article 5; Clauses 1, 2 Article 6; Article 7; Clause 4 Article 8; Clauses
2, 3, 4 Article 10; Point b Clause 1, Clause 2, Point a Clause 5, Clause 8
Article 11; Point e Clause 1, Clause 2 Article 15; Article 19; Article 21;
Article 31; Clause 1 Article 32; Clause 5 Article 34; Article 39; Article 40;
Article 41; Article 43a; Article 44a; Clauses 5, 6 Article 47a; Clauses 2, 6a,
7 Article 48; Clauses 1, 7 Article 49; Clauses 3, 4a, 4b, 7 and heading of
Article 50.
2. The phrase “tổ chức tín dụng” (“credit
institutions”) is replaced with the phrase “tổ chức tín dụng Việt Nam”
(“Vietnamese credit institutions”) in Clauses 5, 8, 11 Article 3; Clause 2
Article 12; Clauses 5, 6 Article 13; Point g Clause 1 Article 15; Article 15a;
Article 16; Article 17; Article 17a; Article 17b; Article 18; Article 20;
Article 22; Clause 4 Article 28; Article 29; Article 30; Article 35; Clauses 2,
3 Article 36; Clause 3 Article 38; Article 43; Article 44; Article 45; Clauses
1, 2, 2a, 2b, 2c, 3, 4, 5, 6, 8 Article 46; Clauses 3, 5 Article 49; Clause 4
Article 50.
3. The phrase “tái cơ cấu” is replaced with the
phrase “cơ cấu lại” (without change in their meaning) in Point b Clause 5
Article 11; Clause 2b Article 46.
4. The phrases “tổ chức có chức năng định giá độc lập”
(“organization providing independent valuation”), “tổ chức định giá độc lập”
(“independent valuation organization”) are replaced with the phrase “doanh nghiệp
thẩm định giá” (“valuation firm”) in Point dd Clause 1 Article 20; Clause 2
Article 34; Point a Clause 4 Article 35; Clause 4 Article 38.
5. The phrase “tổ chức có chức năng thẩm định giá”
(“organization providing valuation services”) is replaced with the phrase
“doanh nghiệp thẩm định giá” (“valuation firm”) in Article 47a.
6. The phrase “sử dụng trái phiếu đặc biệt” (“with
special bonds”) in clause 2, clause 3 Article 6 is abrogated.
7. Point d Clause 3 Article 47b is abrogated.
8. Point c Clause 4a Article 50 is abrogated.
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The Chief of Office, head of SBV Banking
Supervision Agency, heads of SBV’s affiliated units, Directors of SBV’s
provincial branches, credit institutions, FBBs, VAMC, and relevant
organizations and individuals are responsible for the implementation of this
Circular.
Article 4. Effect
1. This Circular comes into force from July 01,
2024.
2. This Circular nullifies Clauses 3, 4 Article 1
of the Circular No. 09/2017/TT-NHNN dated August 14, 2017 of the Governor of
the State Bank of Vietnam providing amendments to the Circular No.
19/2013/TT-NHNN./.
PP. GOVERNOR
DEPUTY GOVERNOR
Doan Thai Son