What is thorough application of regulations on pilot bad debt handling of credit institutions according to Resolution 42/2017/QH14 in Vietnam?

What is thorough application of regulations on pilot bad debt handling of credit institutions according to Resolution 42/2017/QH14 in Vietnam?

On May 15, 2023, the Supreme People's Court issued Directive 02/CT-CA in 2023 guiding a number of contents on pilot bad debt handling of credit institutions as follows:

- Organize the dissemination of the entire content of Resolution 63/2022/QH15 to Judges, Examiners and Court Clerks within the scope of management;

Thoroughly grasp the continued application of regulations of Resolution 42/2017/QH14 on pilot bad debt handling of credit institutions;

At the same time, thoroughly grasp the application of Resolution 03/2018/NQ-HDTP of the Council of Judges of the Supreme People's Court guiding the application of a number of provisions of law in resolving disputes on handling bad debts and collateral for bad debts at the People's Court.

- Actively, proactively and speed up the progress of resolving bad debt disputes according to the authority, order and procedures prescribed by law. In case of any difficulties or problems, promptly report them to the Supreme People's Court for answers.

- Proactively and regularly update the system of legal documents to properly apply regulations and instructions of legal documents during the performance of tasks.

The Supreme People's Court requests the Chief Justices of the High People's Courts, the Chief Justices of the People's Courts of provinces and centrally run cities and the Heads of units under the Supreme People's Court after receiving This dispatch says:

Notify Judges, Examiners, Court Clerks in their agencies and units and People's Courts of districts, towns and cities within their territorial jurisdiction for information and implementation.

What is thorough application of regulations on pilot bad debt handling of credit institutions according to Resolution 42/2017/QH14 in Vietnam? (Image from the Internet)

What are regulations on purchase and sale of bad debts by bad debt purchaser/manager in Vietnam?

In Article 6 of Resolution 42/2017/QH14, there are regulations on buying and selling bad debts of bad debt trading and handling organizations as follows:

- Organizations that buy, sell, and handle bad debts are allowed to buy bad debts that are accounted for on or off the credit institution's balance sheet;

Except for joint venture credit institutions and credit institutions with 100% foreign capital, they are allowed to convert bad debts purchased with special bonds into bad debts purchased at market prices according to the guidance of the State Bank of Vietnam.

- Organizations that buy, sell, and handle bad debts are allowed to sell bad debts to legal entities and individuals, including businesses that do not have the business function of buying and selling debt.

- Organizations that buy, sell and handle bad debts are agreed upon with credit institutions specified in Clause 1 of this Article to purchase bad debts at a purchase price equal to the valuation value of an independent valuation organization;

Handle, sell, and recover debt according to the provisions of law and divide the remaining value of the amount recovered from this bad debt after deducting the purchase price and processing costs.

Organizations that buy, sell and handle bad debt must agree with credit institutions to select an independent valuation organization.

During what period of time was the pilot program on bad debt handling of credit institutions applied in Vietnam?

In Subsection 2.3, Section 2 of Resolution 63/2022/QH15, there are regulations on the deadline for applying Resolution 42/2017/QH14 on pilot bad debt handling of credit institutions as follows:

2.3. Regarding extending the deadline to apply Resolution No. 42/2017/QH14 on pilot bad debt handling of credit institutions, the National Assembly agreed to extend the deadline to apply all provisions of Resolution No. 42/2017 /QH14 from August 15, 2022 to December 31, 2023. Assign the Government to research and propose to legislate regulations on handling bad debts and collateral for bad debts along with reviewing, amending and supplementing the Law on Credit Institutions; submitted to the National Assembly for consideration at the latest at the 5th Session (May 2023).

During the period of extending the application period of all provisions of Resolution No. 42/2017/QH14, the Government is requested to have solutions to overcome the difficulties and obstacles mentioned in Report No. 174/BC-CP dated May 11, 2022, direct to strengthen coordination between agencies and units associated with responsibilities in organizing the implementation of the Resolution, ensuring the effectiveness and efficiency of the Resolution.

Thus, the pilot period for handling bad debts of credit institutions is extended from August 15, 2022 to December 31, 2023 in Vietnam.

Best regards!