Currency used for the purchase and sale of bad debts between Vietnam Asset Management Company and credit institutions

According to Article 6 of Circular No. 19/2013/TT-NHNN of the State Bank of Vietnam, the currency used for the purchase and sale of bad debts between Vietnam Asset Management Company (VAMC) and credit institutions is VND.

However, there are 02 special cases to note regarding the currency conversion price for transactions between the Asset Management Company and a credit institution, specifically:

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

- 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;

- 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;

Second: 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.

Also according to Circular No. 19/2013/TT-NHNN, 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.

View full text at Circular No. 19/2013/TT-NHNN of the State Bank of Vietnam, effective from September 15, 2013.

Thu Ba

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