STATE BANK OF VIETNAM -------	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------
No. 19/2013/TT-NHNN	Hanoi, September 06, 2013

 

CIRCULAR

ON THE PURCHASE, SALE AND SETTLEMENT OF BAD DEBTS OF VIETNAM ASSET MANAGEMENT COMPANY

Pursuant to the Law on the State bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on credit institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Enterprises No. 60/2005/QH11 dated November 29, 2005;

Pursuant to the Government's Decree No. 96/2008/ND-CP on August 26, 2008 defining the functions, tasks, powers and organizational structure of the State bank of Vietnam;

Pursuant to the Government's Decree No. 53/2013/ND-CP on the establishment, organization and operation of Vietnam Asset Management Company;

At the request of the Chief Banking Inspector,

The Governor of the State bank of Vietnam promulgates a Circular on the purchase, sale, and settlement of bad debts of Vietnam Asset Management Company;

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular deals with the purchase, sale, and settlement of bad debts of Vietnam Asset Management Company (VAMC), the issuance, management and redemption of special bonds.

Article 2. Subjects of application

1. VAMC.

2. Vietnamese credit institutions (hereinafter referred to as credit institutions).

3. Borrowers.

4. Guarantors.

5. Other organizations and individuals related to the purchase, sale, and settlement of bad debts of VAMC, the issuance, management and redemption of special bonds.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Debt-selling credit institutions mean the credit institutions that sell bad debts to VAMC.

2. Debt restructuring means the adjustment of repayment term, debt rescheduling, writing of or reduction of fines for overdue payments, adjustment of interest rates of bad debts.

3. Adjustment of repayment term means the agreement to change the repayment term of principal and interest by the repayment deadline stated in the credit contract, entrustment contract, or corporate bond purchase contract so that the repayment deadline remains unchanged.

4. Debt rescheduling means the agreement extend the deadline for paying principal and interest stated in the credit contract, entrustment contract, or corporate bond purchase contract.

5. Authorized credit institutions are the debt-selling credit institutions authorized by VAMC to perform one or some tasks of VAMC.

6. The book value of outstanding principal of bad debts at the credit institution means the outstanding principal of the bad debt on the balance sheet of the credit institution; the book value of outstanding principal of the bad debt at VAMC is the purchase price or the outstanding principal of the bad debt on the balance sheet of VAMC.

7. Debt means the outstanding debt of the credit extension contract or agreement, entrustment contract, or corporate bond purchase contract of the credit institution.

8. Special bonds are valuable papers issued by VAMC to buy bad debts of credit institutions.

9. Date of issue of special bonds is the day on which the bonds come into operation and is the basis for determine the day to redeem bonds.

Article 4. Promulgation and announcement of policies and regulations on purchasing, selling and settling bad debts

1. VAMC shall promulgate and implement the policies and regulations on:

a) The permissible operations according to Clause 1 Article 12 of Pursuant to the Government's Decree No. 53/2013/ND-CP on the establishment, organization and operation of Vietnam Asset Management Company (hereinafter referred to as the Decree No. 53/2013/ND-CP);

b) Issuance, management and redemption of special bonds;

c) Transparency of purchase, sale, and settlement of bad debts;

d) Restructuring of bad debts and financial supports for borrowers.

2. Within 05 working days from the date of promulgation, amendment, revocation, supersession of the policies, regulations in Clause 1 of this Article, VAMC shall announce them on its website and send reports to the State bank (Bank Supervision and Inspection Agency) directly or by post for inspection and supervision.

Chapter 2.

PURCHASE AND SALE OF BAD DEBTS BETWEEN VAMC AND CREDIT INSTITUTIONS

SECTION 1. GENERAL PROVISIONS

Article 5. The power to purchase, sell bad debts

The power to decide the purchase, sale of bad debts, the power to conclude and execute debt purchase contracts of VAMC and credit institutions shall comply with law, the charters of VAMC and credit institutions.

Article 6. Currency

1. The currency used for the purchase and sale of bad debts between VAMC and credit institutions is VND.

2. When VAMC uses special bonds to buy bad debts in foreign currencies of credit institutions:

a) If the bad debt is in USD, the exchange rate is the average exchange rate on the inter-bank foreign exchange market announced by the State bank when the debt purchase contract is concluded;

b) If the bad debt is other currencies than USD, the exchange rates are the exchange rates used for calculating export and import tax applied to such currencies that are announced by the State bank when the debt purchase contract is concluded;

3. When VAMC uses special bonds to buy bad debts in gold of credit institutions, the gold purchase price announced by SJC when the debt purchase contract is concluded shall apply.

Article 7. Transferring rights and interests associated with bad debts

1. When bad debt is sold, all rights and interests associated with the bad debt, collateral, and other security measures shall be preserved and transferred to the debt buyer under the debt purchase contract.

2. When VAMC and the credit institution reach agreement on adjusting the security conditions of the bad debt, a written approval of the borrower and guarantor shall be obtained.

Article 8. Principles buying and selling bad debts

1. Transparency.

2. Compliance to law and the debt purchase contract.

3. Limitation of risks and expenses during bad debt purchase.

4. The purchase shall be made with regard to each bad debt or borrower (if a borrower has multiple bad debts at a credit institution), or group of borrower (if an asset is put up as collateral for multiple bad debts of multiple borrowers at a credit institution) or in other legitimate methods agreed by both parties.

Article 9. Extending credit to borrowers that sell bad debts to VAMC

The borrowers that sell bad debts to VAMC and have effective plans for production, business, or project of investments shall be granted credit by credit institutions or branches of foreign banks under agreement and within the law.

SECTION 2. ISSUANCE OF SPECIAL BONDS OF VAMC

Article 10. Issuer, purposes and principles of special bond issuance

1. Special bond issuer is VAMC. VAMC shall authorize transaction offices of the State bank to organize the issuance of special bonds in accordance with this Circular.

2. VAMC shall issue special bonds to buy bad debts of credit institutions.

3. Bonds shall be issued separately based on the actual demand and the plan for issuing special bonds approved by the State bank.

4. A special bond issued corresponds to a bad debt sold. If the bad debt sold is a syndicated loan, VAMC shall issue special bonds to every credit institution that provides the syndicated loan.

Article 11. Terms and conditions of special bonds

1. Face value of special bonds

a) The face value of special bonds equals the purchase price of the bad debt according to Clause 1 Article 14 of the Decree No. 53/2013/ND-CP and Clause 4 Article 10 of this Circular.

b) If the bad debt sold is a syndicated loan , the face value of special bonds issued to each credit institution that provides the syndicated loan shall correspond to the book value of outstanding principal of the bad debt after deducting the unused reserve for such bad debt, which is monitored by the credit institutions provide the syndicated loan.

2. Special bonds are issued in VND.

3. Forms of special bonds

a) Special bonds shall be issued in the form of book entries or identified electronic data;

b) Special bonds shall be issued in the form of certificates of registration.

4. VAMC shall decide the forms of special bonds.

5. Special bonds must be deposited at the State bank according to regulations of the State bank on depositing valuable papers, and used for refinancing

6. The credit institutions holding special bonds shall be exempt from depository fees when depositing special bonds at the State bank.

Article 12. Special bond issuance plan

1. The Special bond issuance plan is a compilation of analyses, assessments, and suggestions pertaining to the issuance of special bonds of VAMC.

2. The Special bond issuance plan shall specify:

a) The estimated volume, value of bad debts being bought and the debt-selling credit institutions;

b) Estimated demand and roadmap for issuing special bonds;

c) Suggested structuring of special bond period;

d) Assessment of VAMC’s capacity for buying, managing and settling bad debts;

dd) Other information requested by the State bank.

Article 13. Procedure for requesting approval for the Special bond issuance plan

1. VAMC shall make an application for the approval for the Special bond issuance plan and send it to the State bank (Bank Supervision and Inspection Agency) directly or by post. The application consists of:

a) A written request for the approval for the Special bond issuance plan signed by the legal representative of VAMC;

b) The resolution of the Member assembly of VAMC on passing the Special bond issuance plan enclosed with the Special bond issuance plan specified in Article 12 of this Circular.

2. Before December 15, VAMC shall make the application specified in Clause 1 of this Article to request the State bank to approve the Special bond issuance plan of the next year, except for the case in Clause 3 of this Article.

3. The time to make the application for approval of the Special bond issuance plan in 2013 of VAMC shall be decided by the Member assembly of VAMC.

4. Within 15 working days from the day on which the valid application for approval of Special bond issuance plan according to Clause 1 of this Article, the State bank shall send VAMC a written response as to approving or not approving the Special bond issuance plan. If the plan is not approved, explanation must be provided in the written response sent to VAMC.

5. Based on the Special bond issuance plan approved by the State bank, the capacity of VAMC, and the demand for settling bad debts of credit institutions, VAMC shall decide the issuance of special bonds to buy bad debts of credit institutions.

6. Based on the monetary policy targets, the requirements for restructuring credit institutions, and the target of settling bad debts in each period, the State bank shall consider amending, superseding, or annulling the approved Special bond issuance plan where necessary.

Article 14. Elements of a special bond

1. A special bond shall contain at least:

a) The name, address, number of the Decision on establishment, and business registration number of VAMC;

b) The face value;

c) Term;

d) Issuance date;

dd) Information about the debt purchase contract and bad debts bought with special bonds;

e) Information about the credit institution that holds special bonds: Name of the credit institution, number of the license for establishment or Certificate of Business registration, address.

g) If the special bonds are issued in the form of certificates, they must bear the symbol, serial numbers, signature of the legal representative of VAMC, other signatures required by VAMC, and the seal of VAMC.

2. Apart from the information in Clause 1 of this Article, VAMC may add more information on the special bond as long as it is not against the law.

Article 15. Responsibilities for the management and use of special bonds

1. VAMC shall:

a) Establish a system to manage and monitor the special bonds issued;

b) Exercise the rights and perform the duties pertaining to special bonds;

c) Receive and redeem special bonds as prescribed by law;

d) Report the issuance and redemption of special bonds to the State bank.

2. The credit institution that holds special bonds shall:

a) Exercise the rights and perform the duties pertaining to special bonds;

b) Submit and redeem special bonds at VAMC as prescribed by law;

c) Apply the 20% risk factor of special bonds when calculating capital adequacy ratio of the credit institution;

d) Only use special bonds to take refinancing loans at the State bank or buy the bad debts sold to VAMC as prescribed in this Circular.

SECTION 3. VAMC BUYING BAD DEBTS WITH SPECIAL BONDS

Article 16. Conditions for bad debts to be bought by VAMC with special bonds

1. Bad debts shall be bought by VAMC when the conditions below are satisfied:

a) Bad debts being bought:

(i) The bad debts owed during credit extension, including bad debts from loans, discounts, finance lease, factoring, and other bad debts defined by the State bank;

(ii) The payments for corporate bonds not being listed on securities market or not registered, which are issued by unlisted public companies (hereinafter referred to as unlisted corporate bonds) that are bought by debt-selling credit institutions, part or the whole principal and interest of which has been overdue for 90 days or more, or the repayment is not overdue or has been overdue for fewer than 90 days but the bond issuer owe bad debts to such credit institution;

(iii) The entrusted purchase of unlisted corporate bonds, entrusted credit extension underwritten by the debt-selling credit institution, part or the whole principle and interest of which is overdue for 90 days or more, or the repayment is not overdue or has been overdue for fewer than 90 days but the entrusted party or the beneficiary owes bad debts to such credit institutions.

b) The bad debts are secured;

c) The bad debts and their collateral are legitimate and have valid documents, in particular:

(i) The credit contract, entrustment contract, corporate bond purchase contract, guarantee contract must specify the creditor’s rights of the credit institution, the liability to repay debts of the borrower, the guarantor, and the debt payer;

(ii) The bad debts are not used for underwriting liabilities of the credit institution; the collateral for the bad debts is not in dispute when they are sold.

d) The borrower still exists;

dd) The book value of outstanding principal of the bad debts of a borrower or a group of borrowers stipulated in Clause 4 Article 8 of this Circular when the debt is sold is not below 3 billion VND (if the debt is owed by a group of borrower or a organization), or not below 1 billion VND (if the debt is owned by a natural person) or another limit decided by the Governor of the State bank.

2. Based on the conditions in Clause 1 of this Article, the Special bond issuance plan approved by the State bank, the capacity of VAMC, and the market developments, VAMC shall decide the bad debts to be bought in each period.

3. The State bank shall consider and request the Prime Minister to allow VAMC to buy bad debts of the credit institutions that fail to satisfy all conditions in Clause 1 of this Article at the request of VAMC in order to ensure the safe operation of credit institutions and quickly settle bad debts.

Article 17. Application for purchase of bad debts with special bonds

1. The credit institution shall review the bad debts that meet the conditions in Clause 1 Article 16 of this Circular, then make and send an application for debt purchase to VAMC. The application consists of:

a) The written request for debt purchase using the form provided by VAMC;

b) The list of bad debts and information about bad debts requested by VAMC; assessment of each borrower and bad debt the credit institution wishes to sell to VAMC (overdue period, financial condition and operations of borrowers, guarantors, collateral, recovery probability); suggested term of the special bonds corresponding to each bad debts;

c) A written guarantee that the bad debts are not used to secure liabilities of the debt-selling credit institutions, and the collateral for bad debs are not in dispute when they are sold;

d) Copies of credit contracts, entrustment contract, corporate bond purchase contracts, collateral contracts certified by the legal representative of the debt-selling credit institution;

dd) Copies of the papers related to the bad debts, collateral, borrowers, guarantors, and debt payers certified by the legal representative of the debt-selling credit institution at the request of VAMC.

2. The papers stipulated in Point a, Point b, and Point c Clause 1 of this Article must be signed by the legal representative of the debt-selling credit institution. The papers stipulated in Point d and Point dd Clause 1 of this Article must be concluded by legal representatives the parties, notarized, authenticated, and registered as prescribed by law (if any).

3. If VAMC does not authorizes the debt-selling credit institution to perform undertake some operations as prescribed in Clause 2 Article 12 of the Decree No. 53/2013/ND-CP , the debt-selling credit institution shall submit the original documents stipulated in Point d and pt dd Clause 1 of this Article to VAMC.

4. The debt-selling credit institution is responsible for the adequacy, accuracy and truthfulness of the documents and papers related to collateral, borrowers, guarantors, debt payers, and the bad debts sold to VAMC.

Article 18. Procedure for buying bad debts with special bonds

1. Within 05 working days from the day on which the application made by the credit institution is received, VAMC shall examine it and request the debt-selling credit institution to supplement the application where necessary.

2. Within 10 working days from the day on which the sufficient and valid application is received according to Article 17 of this Circular, VAMC shall examine the sufficiency and validity of the application, and send a written response the credit institution. If the debts are not debt, the response must provide explanation.

3. Within 05 working days from the day on which the written agreement to buy bad debts of VAMC, the credit institution and VAMC shall conclude the debt purchase contract.

4. Within 10 working days from the day on which the debt purchase contract is signed, the debt-selling credit institution shall notify its borrowers, debt payers, and guarantors of the contract so they could fulfill their liabilities to VAMC.

5. After the debt purchase contract is concluded, VAMC shall keep checking, collecting information, assessing borrowers, bad debts, the accuracy and truthfulness of the documents and papers related to the bad debts and collateral.

Article 19. The right to unilaterally terminate the debt purchase contract of VAMC

1. VAMC is entitled to unilaterally terminate the debt purchase contract in the cases below:

a) There is evidence that the bad debts being bought do not meet the business in Clause 1 Article 16 of this Circular, except for the cases in Clause 3 Article 16 of this Circular;

b) The debt-selling credit institution violates Clause 2 Article 21, Point a, Point b Clause 3 and Clause 4 Article 31 of the Decree No. 53/2013/ND-CP .

2. The debt purchase contract shall be unilaterally terminated in the following order:

a) VAMC shall send a written notification to the debt-selling credit institution, specifying the reasons for unilateral termination;

b) Within 05 working days from the day on which the written notification is received, the debt-selling credit institution shall repay the refinancing loan to the State bank and have special bonds unblocked by the State bank (transaction offices) as prescribed. The debt-selling credit institution shall return the special bonds to VAMC and take back the bad debts.

c) After taking back the bad debts from VAMC, the debt-selling credit institution shall classify them into the group of debts to which the level of risk is not lower than that to the debts classified by the debt-selling credit institution when bad debts are sold to VAMC.

3. The repayments collected during the period from the day VAMC buys bad debts to the day VAMC returns the bad debts to the debt-selling credit institution shall be settled in accordance with Clause 2 Article 43 of this Circular.

Article 20. Contract to buy bad debts with special bonds

1. The debt purchase contract shall be made in writhing and signed by VAMC, the credit institution and relevant parties (if any). The debt purchase contract specify at least:

a) Names and addresses of the debt buyer and debt seller;

b) Names and addresses of borrowers, guarantors, and other parties (if any) related to the bad debts being sold;

c) The book value of outstanding principal of the bad debt being bought;

d) The purchase price and method of payment;

dd) The measures for ensuring the latest value of collateral for bad debts valuated by the credit institution or an independent valuating organization before the debt purchase is requested;

e) Effect of the debt purchase contract;

g) Redemption of special bonds, settlement of repayments, and repurchase of bad debts sold to VAMC;

h) VAMC shall use the repayments of the bad debts bought with special bonds, to which the credit institution is entitled, to repay the refinancing loans based on the special bonds as prescribed in Point b Clause 1 Article 43 and Clause 3 and 44 of this Circular, and regulations on the State bank on refinancing loans based on special bonds.

i) The rights and obligations of the parties, including the right of VAMC to restructure bad debts and unilaterally terminate the debt purchase contract, the obligation of the debt-selling credit institutions to allow VAMC to restructure the bad debts and repurchase the bad debts when special bonds are redeemed as prescribed in this Circular, the obligation of the debt-selling credit institution to pay the amounts mentioned in Point a Clause 2 Article 23 of this Circular and other amounts prescribed by law to VAMC.

k) The method and time for completing the procedure for transferring debts, collateral, documents and papers related to the bad debts, collateral, borrowers, guarantors, and debt payers.

2. If the bad debt being bought is a syndicated loan VAMC shall work with the lead credit institution; the debt purchase contract must be signed by VAMC and all credit institutions that provide the syndicated loan or the lead credit institution authorized by the other credit institutions to sign the debt purchase contract with VAMC.

Article 21. Selling bad debts at the request of the State bank

1. The credit institutions, the proportion of bad debts to total outstanding debts is 3% or over, shall sell debts to VAMC. If the credit institution does not sell debts to VAMC, the State bank shall consider tanking the measures in Clause 5 Article 14 of the Decree No. 53/2013/ND-CP .

Based on the result of inspection and independent audit, the State bank shall compel the credit institution to sell debts to VAMC to ensure the safe proportion of bad debts of the credit institution and take necessary measures as prescribed by law.

2. Within 05 working days from the day on which the credit institution is requested in writing by the Governor of the State bank to sell its debts to VAMC, the credit institution shall send an application for debt purchase to VAMC as prescribed in Article 17 of this Circular.

3. VAMC and the debt-selling credit institution shall follow the procedure for selling and buying debts specified in Article 18 of this Circular.

Article 22. Cooperation in exchanging information about bad debts bought with special bonds

1. VAMC shall take charge and cooperate with debt-selling credit institutions and authorized credit institutions to develop the database and IT system to serve the management, settlement of bad debts, redemption of special bonds, and repurchase of bad debts.

2. Authorized credit institutions shall process the information below and send written reports to VAMC:

a) The measures for collecting bad debts;

b) The cases in which the borrowers request that debts be changed into capital contribution, share capital, investment, financial support, or change of debt repayment conditions; restructuring of bad debts and VAMC to provide guarantee;

c) Other information requested by VAMC.

SECTION 4. BAD DEBTS BOUGHT BY VAMC AT MARKET VALUES

Article 23. Conditions for bad debts to be bought by VAMC at market values

1. The bad debts shall be bought by VAMC at market values when the conditions below are satisfied:

a) The bad debts meet the conditions in Clause 1 Article 16 of this Circular;

b) VAMC considers the investment in buying bad debts as completely recoverable;

b) The collateral for bad debts is liquid;

d) The borrowers are likely to repay debts or have feasible repayment plans.

2. Then buying bad debts at market values, VAMC shall valuate the bad debts or hire an independent valuating organization to do it.

Article 24. Plan for buying debts at market values

1. The plan for buying bad debts at market value is a compilation of analyses, assessments, and recommendations pertaining to the sale and settlement of bad debts according to market principles.

2. The plan for buying debts at market values shall specify at least:

a) The bad debts being bought at market values (sort by borrower, field, and type of collateral);

b) Estimated of total amount of bad debts being bought, sources of capital and financial condition of VAMC;

c) Analyses and assessment of effectiveness, risks, and probability of recovering the investment in buying debts at market values;

d) Measures for selling, settling debts and collateral.

Article 25. Procedure for approving the plan for buying debts at market values

1. VAMC shall make 01 application for approval of the plan for buying bad debts at market value and send it to the State bank (Bank Supervision and Inspection Agency) directly or by post). The application consists of:

a) A written request for the approval for the plan for buying bad debts at market value signed by the legal representative of VAMC;

b) A resolution of the Member assembly of VAMC on passing the plan for buying bad debts at market value enclosed with the plan for buying bad debts at market value specified in Article 24 of this Circular.

2. Before December 15, VAMC shall make an application as prescribed in Clause 1 of this Article to request the State bank to approve the plan for buying bad debts at market value of the next year.

3. Within 15 working days from the day on which the sufficient and valid application is received, the State bank send VAMC a written response as to approving or not approving the plan for buying bad debts at market values made by VAMC. If the plan is not approved, explanation must be provided in the written response.

4. Based on the condition of VAMC, market developments and necessity for settling bad debts, the State bank shall consider revising, superseding, or annulling the approved plans for buying bad debts at market value where necessary.

Article 26. Buying bad debts at market values

1. Based on the plan for buying bad debts at market value approved by the State bank, financial capacity, economic effectiveness, and market developments, VAMC shall decide and take responsibility for the purchase of bad debts at market values after the takes below are fulfilled:

a) Determining whether the bad debts meet the conditions in Clause 1 Article 23 of this Circular;

b) Determining the market price of bad debts, including collateral for such bad debts;

c) Analyses and assessment of effectiveness, risks, and probability of capital recovery;

d) Analyzing and assessing the status and potential of bad debts, borrowers, guarantors, debt payers, and conditions for buying debts agreed with the debt-selling credit institution;

dd) Feasible plans for settling debts and their collateral.

2. The purchase and sale of bad debts between VAMC and the debt-selling credit institutions regulations of the State bank of selling bad debts applicable to credit institutions.

Chapter 3.

SETTLING BAD DEBTS AND COLLATERAL

SECTION 1. RESTRUCTURING DEBTS AND SUPPORTING BORROWERS

Article 27. Rules for restructuring the bad debts bought

1. VAMC shall consider restructuring the bad debts bought at the request of borrowers when the conditions in this Circular are met.

2. VAMC shall discuss with the debt-selling credit institution before deciding to restructure bad debts in the cases mentioned in Clause 4 Article 28, Clause 2 Article 29, and Clause 2 Article 30 of this Circular.

3. The restructuring of bad debts must conform to the Decree No. 53/2013/ND-CP and this Circular, the conditions for debts, borrowers, VAMC, debt-selling credit institutions, developments of the monetary market, the requirements for settling bad debts in each period, agreements in the credit contract, entrustment contract, corporate bond purchase contract, and debt purchase contract.

Article 28. Adjustment of interest rates of the bad debts bought by VAMC

1. VAMC shall consider adjusting the rates of interest on the bad debts to a reasonable level that suits the solvency of borrowers and market interest rates in each period, agreements in credit extension contracts, promissory note, entrustment contract, corporate bond purchase contract, debt purchase contract.

2. VAMC shall announce the reasonable interest rates mentioned in Clause 1 of this Article every quarter.

3. VAMC shall consider adjusting the interest rates as prescribed in Clause 1 of this Article when the bad debts and the borrower meet the conditions below:

a) The borrower fully cooperates with VAMC and the authorized credit institutions;

b) The borrower has a feasible plan for paying debts, financial or operational restructuring;

c) The borrower is suffering from temporary financial difficulties, and the reduction in interest rate of the bad debt help the borrower alleviate them and restore the production or business;

d) The bad debts do not violate Article 126 of the Law on credit institutions when the credit contract is signed.

4. VAMC shall discuss with the debt-selling credit institution before adjusting the rates of interest on the bad debts bought with special bonds mentioned in Clause 1 of this Article. Within 05 working days from the day on which VAMC issues a written suggestion on interest rate adjustment, the debt-selling credit institution shall reply VAMC in writing.

5. Within 05 working days from the day on which the adjustment of interest rate is made, VAMC shall notify it to the borrowers and the debt-selling credit institution (if bad debts are bought with special bonds).

Article 29. Exemption, reduction of fines, fee, and overdue interest

1. When buying bad debts, VAMC shall consider reducing or exempting the fine, fee and overdue interest that is not paid by the borrower as long as the borrower meets the conditions below:

a) The borrower meets the conditions in Clause 3 Article 28 of this Circular;

b) The borrower immediately repays or promises to repay within 60 days at least 5% of the outstanding principal when the exemption, reduction of fines, fee, and overdue interest is being considered.

2. VAMC shall discuss with the debt-selling credit institution if the exemption, reduction of fines, fee, and overdue interest is being considered after the contract to buy bad debts with special bonds. The debt-selling credit institution shall provide its opinions about the issues raised by VACM within 05 working days from the day on which VAMC makes a written request for opinions.

3. Within 05 working days from the day on which the exemption, reduction of fines, fee, and overdue interest is granted, VAMC shall notify it to the borrowers and the debt-selling credit institution (if bad debts are bought with special bonds).

Article 30. Measures for restructuring repayment deadline

1. VAMC shall consider restructuring the repayment deadline in the form of adjusting the repayment term or debt rescheduling when the borrower meets the business below:

a) The borrower has a feasible repayment plan;

b) When adjusting the repayment term of principle and/or interest, the borrower is incapable of duly repaying the principal and/or interest by the repayment deadline stated in the credit contract, entrustment contract, corporate bond purchase contract, and is considered capable of paying debts in the next period after the repayment term is restructured;

b) When rescheduling debts, the borrower is incapable of duly repaying the principal and/or interest within the repayment period stated in the credit contract, entrustment contract, corporate bond purchase contract, and is considered capable of paying debts within a certain period of time after the agreed repayment deadline;

d) The rescheduling of bad debts bought with special bonds shall not exceed the remaining period of the corresponding special bonds.

2. VAMC shall discuss with the debt-selling credit institution before restructuring the deadline for repaying bad debts bought with special bonds. The debt-selling credit institution shall provide its opinions about the issues raised by VACM within 05 working days from the day on which VAMC makes a written request for opinions.

3. Within 05 working days from the day on which the repayment deadline is restructured, VAMC shall notify the borrowers and the debt-selling credit institution (if bad debts are bought with special bonds).

Article 31. Financial support for borrowers

1. VAMC shall consider taking one or some of the following measures for financially supporting borrowers:

a) Provide guarantee for borrowers of the credit institution;

b) Making investment, providing financial support by giving loans or buying corporate bonds;

c) Other forms of investment and financial support approved by the Governor of the State bank.

VAMC shall use assets (not including the bad debts bought with special bonds) and legitimate capital sources to take provide financial support as prescribed in Point b and Point c Clause 1 of this Article.

2. VAMC shall consider making investment and provide financial support when the borrower meets the conditions below:

a) The borrower is likely to recover or have an effective business plan;

b) Measures are taken to ensure the recovery of investments and financial support;

c) The plan for investment and financial support is safe and feasible, which analyzes, assess the risks, economic effectiveness of investments, financial support, guarantee, capital sources, probability of capital recovery, measures for capital recovery, measures for ensuring capital adequacy and solutions for new risks;

d) Other conditions imposed by VAMC.

3. The borrower shall be provided with loan guarantee when the conditions below are met:

a) The borrower is likely to recover or have a new effective business plan or investment project;

b) The borrower has legitimate assets as security for loan guarantee;

c) The plan for investment and financial support is safe and feasible, which analyzes, assess the risks, economic effectiveness of investments, financial support, guarantee, capital sources, probability of capital recovery, measures for capital recovery, measures for ensuring capital adequacy and solutions for new risks;

d) Other conditions imposed by VAMC.

4. Based on the conditions in Clause 2 and Clause 3 of this Article, capital sources and financial capacity of VAMC, VAMC shall request the Governor of the State bank to consider giving an approval before making investment, provide financial support and guarantee to the borrower.

Article 32. Application for approval of the Plan for financial support for borrowers

1. VAMC shall make 01 application for approval of the plan for investment, financial support, the plan for providing guarantee for borrowers of the credit institution (hereinafter referred to as plan for financial support for borrowers) and send it to the State bank of Vietnam (Bank Supervision and Inspection Agency) directly or by post. The application consists of:

a) A written request for the approval for the plan for financial support for borrowers, capital contribution, and purchase of shares of borrowers, which is signed by the legal representative of VAMC;

b) The resolution of the Member assembly of VAMC on passing the plan for financial support for borrowers enclosed with the plan for financial support for borrowers according to Point c Clause 2 and Point c Clause 3 Article 31 of this Circular.

2. Within 15 working days from the day on which the application for approval of the plan for financial support for borrowers is received, the State bank shall send VAMC a written response as to approving or not approving the plan. If the plan is not approved, explanation must be provided in the written response.

Article 33. Some safety limits and risk control in the operation of VAMC

1. The total investment, financial support and guarantee provided by VAMC for a borrower shall not exceed 50% of the charter capital of VAMC.

2. The total contribution to charter capital and share capital mentioned in Point b Clause 1 of this Circular shall not exceed 50% of the charter capital of VAMC.

3. The borrower that is undergoing the process of dissolution, bankruptcy, or has it license confiscated is not eligible for adjustment of loan interest rates, reduction or exemption of fines, fees, and overdue interests, restructuring of repayment period, and financial support.

SECTION 2. SETTLING BAD DEBTS AND COLLATERAL

Article 34. VAMC selling the bad debts bought

1. VAMC shall sell the bad debts that are bought from credit institutions to other organizations and individuals at market values to recoup capital.

2. VAMC shall sell bad debts on the following principles

a) Ensure openness and transparency;

b) Ensure consensus and voluntarism;

c) Bad debts are put up for auction or sold at competitive prices offers with at least 03 participants that are not related buyers. If the bad debts cannot be sold in the form of auction or competitive price offers, VAMC shall sell the bad debts under direct agreement with the debt buyer;

d) The final price for the debt is the most reasonable price in comparison to other offers or the price of an equivalent debt, or the value of the ad debt determined by VAMC or an independent valuating organization in order to reduce loss during the settlement of bad debts.

3. The sale of debts shall be made into a contract.

4. VAMC may authorize a credit institution to sell bad debts under the requirements and conditions imposed by VAMC.

Article 35. Selling the bad debts bought with special bonds

1. VAMC and the debt-selling credit institution shall reach an agreement on the conditions for selling bad debts, including the starting price (if bad debts are sold at auctions) and selling price (if bad debts are sold under direct agreements with the debt buyer).

2. Within 05 working days from the day on which the debt sale contract is signed, VAMC shall send 01 contract to the debt-selling credit institution and notify the debt-selling credit institution of the amount of money to which it is entitled.

3. If the special bonds are not mature, VAMC may sell the bad debts bought with special bonds to the credit institution that sold such bad debts to VAMC under the agreements on conditions and selling prices.

Article 36. Contribution to charter capital, share capital of borrowers being companies

1. VAMC may use the bad debts bought, its assets and legitimate capital sources to:

a) Convert the bad debts bought with special bonds into charter capital or share capital of borrowers being companies as prescribed by law;

b) Using assets (apart from the bad debts bought with special bonds) and legitimate capital sources to make contributions to charter capital, share capital of borrowers being companies after the State bank approves.

2. VAMC shall make contributions to charter capital, share capital to participate in the restructuring of borrowers.

3. VAMC shall formulate a plan for making contributions to charter capital, share capital of borrowers, including analysis and assessment of effective ness of the contributions, financial condition and operation of borrowers, capital sources, probability of capital recovery, and suggestions of measures for recovering capital and restructuring borrowers.

4. VAMC shall make contributions to charter capital, share capital when the conditions below are met:

a) The plan for making contributions to charter capital, share capital of borrowers is feasible. The plan must be approved by the State bank in the case mentioned in Point b Clause 1 of this Article.

b) VAMC is entitled to participate in the restructuring of borrowers;

c) The contributions to charter capital, share capital do not breach the limits on contributions to charter capital, share capital of VAMC according to Clause 2 Article 33 of this Circular;

d) The borrowers are likely to recover financially and resume their operation after VAMC make contributions to their charter capital, share capital;

dd) The borrowers do not undergo the process of dissolution, bankruptcy, or have their operation licenses confiscated.

5. Before converting the bad debts bought with special bonds into charter capital, share capital of borrowers, VAMC and the debt-selling credit institution shall:

a) Reach an agreement on the conversion of bad debts bought with special bonds into charter capital, share capital of borrowers;

b) Within 05 working days from the day on which all bad debts are converted into charter capital, share capital, VAMC shall sell the charter capital, share capital contributions to the debt-selling credit institution according to their values, and redeem the special bonds;

6. The repayments collected during the period from VAMC buys the bad debts until they are converted into charter capital, share capital shall be settled in accordance with Clause 2 Article 33 of this Circular.

Article 37. Procedure for applying for approval of the plan for charter capital, share capital contributions to borrowers being companies

1. VAMC shall make 01 application for approval of the plan for charter capital, share capital contributions to borrowers prescribed in Point a Clause 4 Article 36, and send it to the State bank (Bank Supervision and Inspection Agency) directly or by post. The application consists of:

a) A written request for approval of the plan for charter capital, share capital contributions to borrowers, which is signed by the legal representative of VAMC;

b) The resolution of the Member assembly of VAMC on passing the plan for charter capital, share capital contributions to borrowers enclosed with the plan for charter capital, share capital contributions to borrowers according to Clause 3 Article 36 of this Circular.

2. Within 15 working days from the day on which the sufficient and valid application is received, the State bank shall send VAMC a response as to approving or not approving the plan. If the plan is not approved, explanation must be provided in the written response.

Article 38. Handling and selling collateral for the bad debts that are bought

1. VAMC shall cooperate with relevant organizations to complete the procedure and legal documents of the collateral for the bad debts that are bought.

2. VAMC shall settle collateral for the bad debts that are bought in accordance with Article 18 of the Decree No. 53/2013/ND-CP and relevant laws.

3. For the collateral for the bad debts bought with special bonds, VAMC and the debt-selling credit institution shall reach an agreement on:

a) The sale prices for collateral when it is sold under an agreement with the buyer, or the starting price if the collateral is sold at an auction;

b) The value of collateral when VAMC receives collateral as substitute for the fulfillment of the guarantor’s liabilities.

4. Where VACM receives collateral as substitute for the fulfillment the guarantor’s liabilities, VAMC shall set the prices or an independent valuating organization to determine the market price of the collateral to as the basis for offsetting the liabilities of the borrowers and the debt payers.

SECTION 3. AUTHORIZING, INSPECTING, AND SUPERVISING THE PERFORMANCE OF AUTHORIZED OPERATIONS

Article 39. Contents and methods of authorizing

1. VAMC shall consider authorizing the debt-selling credit institution to undertake one or some operations in Clause 2 Article 12 the Decree No. 53/2013/ND-CP .

2. The authorization mentioned in Clause 1 of this Article shall be made into an authorization contract. The authorization contract shall specify at least:

a) Names and address of the authorizer and authorized party;

b) Contents and scope of authorization;

c) Authorization period;

d) Rights and obligations of both parties.

3. VAMC shall select authorize part or the whole operation in Clause 1 of this Article to the debt-selling credit institution in accordance with this Circular and relevant laws.

4. Within 10 working days from the day on which the authorization contract is signed, the authorized credit institutions shall notify its borrowers, debt payers, guarantors, and relevant parties of the contents and operations delegated to the debt-selling credit institution.

Article 40. Inspecting and supervising delegated operations

1. VANC shall develop a database and IT system to exchange information with authorized credit institutions in order to supervise them performing the delegated operations as prescribed in Clause 1 Article 39 of this Circular.

2. VAMC shall regularly inspect and supervise the authorized credit institutions performing the operations delegated by VAMC in the authorization contract.

Article 41. Rights and obligations of VAMC and authorized credit institutions

1. Rights and obligations of VAMC:

a) Request the authorized credit institutions to submit reports, provide information and documents on the delegated operations;

b) Request the authorized credit institutions to perform. In accordance with the authorization contract and law;

c) Request the authorized credit institutions to compensate for the damage due to breaches of the authorization contract or law during the performance of delegated operations; terminate the authorization contract, or file a law suit against the authorized credit institution that violates the authorization contract as prescribed by law;

d) Report the violations committed by the authorized credit institutions to the State bank (Bank Supervision and Inspection Agency) upon discovery;

dd) For the bad debts bought at market values, VAMC and the authorized credit institution shall reach an agreement on the expenditure on the delegated operations and relevant contents in the authorization contract;

e) Other rights and obligations according to the authorization contract and law.

2. Rights and obligations of the authorized credit institution:

a) Send reports, provide sufficient information and documents at the request of VAMC; take responsibility for the accuracy of the information, documents, and reports provided for VAMC;

b) Cooperate with VAMC and facilitate the inspection and supervision carried out by VAMC during the performance of delegated operations;

c) Comply with the requests made by VAMC to ensure the safety of assets, remedy the misdemeanors, and compensate for the damage suffered by VAMC due to the breaches of the authorization contract or law during the performance of delegated operations;

d) Immediately report the collected repayments to VAMC;

dd) For the bad debts bought at market values, the authorized credit institutions shall have the expenditures on the delegated operations covered by VAMC.

e) The rights and obligations specified in the authorization contract, Clause 4 Article 13 of the Decree No. 53/2013/ND-CP and relevant laws.

Chapter 4.

SETTLEMENT OF COLLECTED DEBTS, REDEMPTION OF SPECIAL BONDS, AND REPURCHASE OF BAD DEBTS

Article 42. Order of priority for settling the bad debts bought with special bonds

All receipts in the form of cash or assets from the collecting, settling, selling debts, collateral after deducting the expenses related to the sale of debts, collateral; preservation, repair, upgrade of collateral shall be paid by VAMC in the following order:

1. Outstanding principal;

2. Undue interest;

3. Overdue interest;

4. Fines (if any);

5. Excess amounts (if any) returned to borrowers, guarantors, and debt payers.

Article 43. Selling repayments of bad debts bought with special bonds

1. The repayments of the bad debts bought with special bonds to which the credit institution is entitled according to Point b Clause 2 this Article shall be settled as follows:

a) if the debt-selling credit institution does not take a refinancing loan based on special bonds, VAMC shall leave it at the debt-selling credit institution in the form of deposit, and shall not withdraw before the redemption of special bonds, except for the case in Article 19 of this Circular;

b) If the debt-selling credit institution takes a refinancing loan based on special bonds, within the first 05 working days of the next quarter, VAMC shall use the collected repayments in cash, to which the credit institution is entitled, to repay the refinancing loan based on special bonds, and deduct this amount against the total amount of receipts from collected debt the credit institution receives when redeeming such special bonds.

2. The repayments of the bad debts bought with special bonds shall be settled as follows:

a) VAMC shall receive a portion of the collected debts in accordance with regulations of the State bank after reaching an agreement with the Ministry of Finance;

b) The debt-selling credit institution is entitled to the residual repayments after deducting the amount received by VAMC specified in Point a Clause 2 of this Article.

Article 44. Redemption of special bonds

1. The special bonds are mature in the cases below:

a) The loan loss provision for special bonds is not lower than the book value of outstanding principal of the bad debts being monitored by VAMC, including the cases below:

(i) VAMC sells bad debts to other organizations and individuals, including the bad debts bought with special bonds to debt-selling credit institutions at market values or agreed prices;

(ii) VAMC converts all bad debts bought into charter capital, share capital of borrowers being companies

b) The special bonds are mature.

2. within 05 working days from the day on which special bonds mature as prescribed in Clause 1 of this Article, the debt-selling credit institution shall return all the refinancing loan based on corresponding special bonds (if any), have the special bonds unblocked by the State bank (transaction offices), and cooperate with VAMC to redeem the special bonds as follows:

a) If the book value of outstanding principal of the bad debt are not fully recovered, the debt-selling credit institution shall repurchase the bad debt from VAMC according to the book value of outstanding principal of VAMC, capital contributions and share capital of borrowers (when converting part of the bad debts into charter capital, share capital of borrowers - if any); return the special bonds related to such bad debts to VAMC, and receive a portion of repayments to which it is entitled from VAMC according to Point b Clause 2 Article 43 of this Circular (if any);

b) If the book value of outstanding principal of the bad debt are fully recovered (including the case the whole bad debt is sold to another organization or individual), the debt-selling credit institution shall repurchase the charter capital, share capital of borrowers (when converting part of the bad debts into charter capital, share capital of borrowers - if any); return the special bonds to VAMC, and receives the repayments to which it is entitled from VAMC as prescribed in Point b Clause 2 Article 43 of this Circular;

c) If the whole bad debt is converted into charter capital, share capital of borrowers being companies, the debt-selling credit institution shall return the special bonds of VAMC and repurchase the capital, shares contributed to borrowers, and pay the repayments to VAMC according to Point a Clause 2 Article 43 of this Circular.

3. If the debt-selling credit institution fails to repay the refinancing loan to the State bank within 05 working days from the maturity date of special bonds according to Clause 1 of this Article, VAMC shall not provide the repayments (if any), bad debts (if any) to the debt-selling credit institution. VAMC shall use the repayments of bad debts bought with special bonds to which the debt-selling credit institution is entitled, according to Point b Clause 2 Article 43 of this Circular, to repay the refinancing loan taken by the debt-selling credit institution from the State bank, and take back special bonds when the whole refinancing loan has been repaid to the State bank.

Article 45. Repurchasing bad debts when redeeming special bonds

1. When repurchasing bad debts as prescribed in Point a Clause 2 Article 44 of this Circular, the debt-selling credit institution shall repay VAMC the amounts to which it is entitled according to Point a Clause 2 Article 43 of this Circular. VAMC shall provide the debt-selling credit institution within information, documents about the outstanding debt, interest, fines, and fees that are not paid by borrowers, other information and documents related to the debts, borrowers, guarantors, and debt payers.

2. The debt-selling credit institution shall repurchase the bad debts from VAMC without the consent of borrowers, debt payers, and guarantors.

3. Within 10 working days from the day on which the debt purchase contract is signed, the debt-selling credit institution shall notify its borrowers, debt payers, and guarantors of the repurchase of debts from VAMC for them to fulfill their liabilities to the credit institution.

Chapter 5.

BUILDING AND USING RESERVE

Article 46. Making loan loss provision for special bonds and using loan loss provision to eliminate the risk related to bad debts

1. During the term of special bonds, the debt-selling credit institution shall include loan loss provision for special bonds in the expense.

2. Every year, within 05 working days before the maturity date of special bonds, the debt-selling credit institution shall make a specific loan loss provision for each special bond using the formula below:

Annual loan loss provision =	Face value of the special bond
	Term of the special bond

The term of special bonds is expressed as years.

3. The debt-selling credit institution shall not make general provision for special bonds.

4. The loan loss provision for special bonds made by the debt-selling credit institution shall be used to:

a) Make up for the deficit of repayments in comparison to the face value of special bonds if all bad debts are sold to other organizations and individuals (except for the case mentioned in Point a Clause 2 Article 44 of this Circular), or all bad debts are used for making contributions to charter capital, share capital of borrowers;

b) Eliminate risk to the repurchased bad debts according to Point a Clause 2 Article 44 of this Circular if the book value of outstanding principal of such bad debts are not fully repaid.

5. The debt-selling credit institution shall reverse the loan loss provision for special bonds after all risks are eliminated according to Clause 4 of this Article, or made additional loan loss provision if the loan loss provision made is not sufficient to eliminate risks according to Clause 4 of this Article.

6. After the loan loss provision is made, the debt-selling credit institution shall remove the bad debts from the balance sheet, monitor the bad debts, and take measures to collect debts in accordance with law and agreements with borrowers.

7. The bad debts shall be removed from the balance sheet in accordance with regulations of the State bank on classification of assets, level and method of making loan loss provision, and using provision to eliminate risks to the operations of branches of foreign banks and credit institution.

Article 47. Classifying, making, and using provisions to eliminate risks to the bad debts bought at market values

1. VAMC shall classify, make and use loan loss provision to handle the payments for the purchase of bad debts according to regulations of the State bank on classification of assets, level and method of making loan loss provision, and using provision to eliminate risks to the operations of branches of foreign banks and credit institution.

2. VAMC shall classify the payments for the purchase of bad debts into the group to which the level of risk is not lower than that to the group of bad debts classified by the debt-selling credit institutions when the bad debts are bought.

Chapter 6.

RESPONSIBILITIES OF RELEVANT ORGANIZATIONS AND INDIVIDUALS

Article 48. Responsibilities of the units affiliated to the State bank

1. Bank Supervision and Inspection Agency shall:

a) Take charge and cooperate with relevant units in making decisions on buying bad debts of credit institutions according to Clause 3 Article 16 of this Circular and submit them to the Governor of the State bank for submission to the Prime Minister;

b) Take charge and cooperate with relevant units in appraising the Special bond issuance plan, the plan for buying bad debts at market values, the plan for financial support for borrowers, and the plan for making contributions to charter capital, share capital of borrowers, and submit them to the Governor of the State bank in the following order:

(i) Within 02 working days from the receipt of the sufficient and valid application for approval of the Special bond issuance plan, the plan for buying bad debts at market values, the plan for financial support for borrowers, and the plan for making contributions to charter capital, share capital of borrowers, Bank Supervision and Inspection Agency shall send written requests for opinions to relevant units of the State bank.

(ii) Within 03 working days from the receipt of the written request made by Bank Supervision and Inspection Agency, the units shall provide Bank Supervision and Inspection Agency with opinions in writing for submission to the Governor of the State bank as the basis for approving or not approving the Special bond issuance plan, the plan for buying bad debts at market values, the plan for financial support for borrowers, and the plan for making contributions to charter capital, share capital of borrowers.

c) Take charge and cooperate with relevant units in appraising the contents prescribed in Clause 4 and Clause 6 Article 13, Point dd Clause 1 and Clause 3 Article 16, Clause 3 and Clause 4 Article 25, Clause 2 Article 32, Clause 2 Article 37 of this Circular, then submit them to the Governor of the State bank for decision;

d) Supervise, carry out inspections, and take action against the violations of legislation on purchase, sale, and settlement of bad debts committed by credit institutions and VAMC;

dd) Take charge and cooperate with relevant units and VAMC in advising the Governor of the State bank on reporting the operation of VAMC;

e) Take charge and cooperate with relevant units in advising the Governor of the State bank on providing guidance and organizing the implementation of this Circular.

2. Transaction offices shall:

a) Provide guidance and organize the issuance of special bonds under the authorization of VAMC in accordance with this Circular;

b) Provide guidance and organize the deposit of special bonds of VAMC;

c) Block the special bonds related to refinancing loans when the credit institutions holding take refinancing loans; stop blocking special bonds when refinancing loans are fully repaid.

3. The Finance and Accounting Authority shall take charge and cooperate with Bank Supervision and Inspection Agency and relevant units in formulating the regulations on bookkeeping of purchase, sale, and settlement of bad debts, the operations related to purchase, sale, and settlement of bad debts of VAMC and credit institutions, then submitting them to the Governor of the State bank for promulgation.

4. The Monetary Forecast and Statistics Authority shall cooperate with Banking Information Technology Authority and relevant units in formulating the regulations on statistical reports, the openness and transparency of the operation of VAMC, the collection of information about purchase, sale, and settlement of bad debts, then submit them to the Governor of the State bank for promulgation.

5. Banking Information Technology Authority shall support the units affiliated to the State bank, VAMC, and credit institutions in exchanging, providing information about purchase, sale, and settlement of bad debts.

6. Credit Information Center shall provide information related to bad debts and borrowers at the request of VAMC in order to settle bad debts.

7. Branches of the State bank in cities and provinces shall carry out supervisions, inspections, and take action against the violations of legislation on purchase, sale, and settlement of bad debts committed by local credit institutions and other local organizations and individuals.

8. Relevant units shall:

a) Cooperate with Bank Supervision and Inspection Agency in advising the Governor of the State bank on organizing the implementation of this Circular;

b) Cooperate with Bank Supervision and Inspection Agency in appraising the contents prescribed in Clause 4 and Clause 6 Article 13, Point dd Clause 1 and Clause 3 Article 16, Clause 3 and Clause 4 Article 25, Clause 2 Article 32, Clause 2 Article 37 of this Circular, then submit them to the Governor of the State bank for decision;

c) Cooperate with Bank Supervision and Inspection Agency in advising the Governor of the State bank on reporting the operation of VAMC;

d) Facilitate the operation of VAMC within the scope of their competence and the instructions of the Governor of the State bank.

Article 49. Responsibilities of VAMC

1. Buy, sell, and settle bad debts responsively and legally; guide credit institutions to make and send the list of eligible bad debts to VAMC according to Clause 1 Article 16 of this Article.

2. Send the State bank reports on the purchase, sale, settlement, and collection of the bad debts bought; issue, use and redeem special bonds, and perform other tasks prescribed by the State bank.

3. Use the repayments of bad debts to which the debt-selling credit institutions are entitled to repay refinancing loans based on special bonds of the debt-selling credit institutions at the State bank.

4. Request the Governor of the State bank to decide the contents in Clause 4 and Clause 6 Article 13, Point dd Clause 1 and Clause 3 Article 16, Clause 4 and Clause 4 Article 25, Clause 2 Article 22, Clause 2 Article 37 of this Circular.

5. Take charge and cooperate with credit institutions and relevant units in taking measures for settling debts, collateral for the bad debts bought with special bonds to repay the State bank the refinancing loans.

6. Discharge the responsibilities in this Circular and other obligations prescribed by law.

Article 50. Responsibilities of credit institutions

1. Assess and identify the bad debts eligible for being sold to VAMC, and take responsibility for such assessment.

2. Report the purchase, sale, and settlement of bad debts to the State bank.

3. The debt-selling credit institutions shall discharge the responsibilities in Clause 3 Article 31 of the Decree No. 53/2013/ND-CP .

4. The credit institutions that sell debts and receive special bonds are obliged to:

a) Discharge the responsibilities in Clause 2 Article 21 of the Decree No. 53/2013/ND-CP ;

b) Use the provisions for bad debts to make up for the difference between the book value of outstanding principal and the prices for such bad debts when they are sold to VAMC;

c) Pay VAMC the amounts mentioned in Point a Clause 2 Article 43 of this Circular and other amounts prescribed by law;

d) Discharge the responsibilities in Clause 4 Article 31 of the Decree No. 53/2013/ND-CP .

5. Closely cooperate with VAMC in the purchase, sale, and settlement of bad debts; responsively, sufficiently, and accurately provide information at the request of VAMC.

6. Discharge the responsibilities in this Circular and other obligations prescribed by law.

Article 51. Responsibilities of borrowers and debt payers

1. Discharge the responsibilities in Article 32 of the Decree No. 53/2013/ND-CP .

2. Discharge the responsibilities in this Circular and other obligations prescribed by law.

Article 52. Responsibilities of guarantors

1. Discharge the responsibilities in Article 33 of the Decree No. 53/2013/ND-CP .

2. Discharge the responsibilities in this Circular and other obligations prescribed by law.

Chapter 7.

IMPLEMENTATION

Article 53. Effect

This Circular takes effect on September 15, 2013.

Article 54. Implementation

Heads of the units affiliated to the State bank, directors of branches of the State bank of provinces and cities, Presidents of the Boards of Directors, the Presidents of the Member assemblies, General Directors (Directors) or Vietnamese credit institutions; the President of the Member assembly and General Director of VAMC, relevant organizations and individuals are responsible for the implementation of this Circular./.

 

PP THE GOVERNOR DEPUTY GOVERNOR Dang Thanh Binh