Handling Secured Debts, Order of Asset Distribution according to Circular 23/2018/TT-NHNN

As stipulated in Article 26 of Circular 23/2018/TT-NHNN, the handling of secured debts of people's credit funds shall be conducted in accordance with relevant legal provisions.

The distribution of the asset value of people's credit funds shall be carried out in the following order:

- Special loans as stipulated in Article 146d of the Law on Credit Institutions (as amended and supplemented);- Fees and costs for the liquidation of assets as prescribed by law;- Wage debts, severance allowances, job loss allowances, social insurance, health insurance for employees according to legal regulations, and other benefits as agreed in collective labor agreements and labor contracts;- Payments to depositors;- Financial obligations to the State;- Loans from the Preservation Fund;- Loans from the Vietnam Cooperative Bank;- Other debts as prescribed by relevant laws.

Should the value of the assets of the people's credit fund, after fully paying the amounts specified in Clauses 1 and 2 of Article 26 of Circular 23/2018/TT-NHNN, remain, the remaining asset value shall be distributed to members based on their capital contribution ratio at the time of asset distribution.

People's credit funds are not allowed to distribute to members the capitals and common assets subsidized by the State (including state-subsidized capital, public works, infrastructure serving the community) but must transfer them to the local government for management. Land allocated to people's credit funds by the State shall be handled in accordance with the provisions of the land law.

More details can be found in: Circular 23/2018/TT-NHNN which took effect on November 01, 2018.

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