VN Central Bank needs to speed up bad debt resolutionThe State Bank of Viet Nam (SBV) needed to speed up the resolution of non-performing loans (NPLs) to bring down the bad debt ratio of the entire banking system – including both NPLs owned by credit institutions and the Viet Nam Asset Management Company - to below 3 per cent by 2020. According to Du, thanks to the regulations, measures to settle bad debts and prevent new ones from arising had been taken synchronously, contributing significantly to improving the quality of loans and reduce the bad debt ratio in the CI system. Despite initial positive results, the central bank has identified shortcomings during the process of resolving bad debts. This resulted in a misunderstanding of collateral between presiding agencies, making it difficult to deal with collateral under Resolution 42. In addition, industry insiders also said that settling NPLs had been easier since the application of Resolution 42, but detailed guidance was still needed.
