Regulations on provisions for credit losses of the Vietnam Development Bank

According to Article 17 of Decree 46/2021/ND-CP on the provisions for credit losses of the Vietnam Development Bank:

1. The provisions for credit losses of the Vietnam Development Bank include provisions for losses on investment credit, provisions for losses on export credit, compulsorily guaranteed loans, and other loans formed from the following sources:

a) Provisions for credit losses made according to the provisions of Article 16 of this Decree;

b) Recovered amounts from principal debts handled using provisions for credit losses;

c) The difference between the selling price of the on-balance-sheet debt after deducting costs related to the sale as prescribed by law and the book value of the debt (principal, interest) as regulated;

d) Transfer of the balance of the investment credit lending, export credit lending, and guarantee risk provisions into the provisions for losses on investment credit, provisions for losses on export credit, and compulsorily guaranteed loans; transfer the balance of risk provisions of other lending activities into risk provisions for other loans at the time this Decree takes effect;

dd) Other sources as prescribed by law.

2. The Vietnam Development Bank shall manage and separately monitor each risk provision and use it to handle losses according to the Credit Loss Handling Regulation at the Vietnam Development Bank issued by the Prime Minister of Vietnam.

a) Provisions for losses on investment credit, provisions for losses on export credit, and compulsorily guaranteed loans are used to handle investment credit debts, export credit debts, and mandatory guaranteed loan debts as prescribed by law; risk provisions for other loans are used to handle losses for other loans as prescribed by law;

b) If the balance of provisions for losses on investment credit, provisions for losses on export credit, and compulsorily guaranteed loans exceeds the required provisions, the Vietnam Development Bank shall reverse the excess difference into income;

c) The balance of risk provisions for other loans, after recovering all outstanding loan balances, may be transferred by the Vietnam Development Bank into the provisions for losses on investment credit, provisions for losses on export credit, and compulsorily guaranteed loans; the excess difference is only reversed into income when the provisions for losses on investment credit, provisions for losses on export credit, and compulsorily guaranteed loans have been fully provisioned as prescribed by this Decree;

d) If the provisions for credit loss are insufficient to cover the risks approved for handling within the year, the Vietnam Development Bank shall report to the Ministry of Finance to take the lead and cooperate with the Ministry of Planning and Investment to submit to the Prime Minister of the Government of Vietnam for consideration and decision under the law.

Respectfully!