Vietnam: Method of asset management company authorizing credit institutions to sell debt

According to Article 39 of Circular No. 19/2013/TT-NHNN of the State Bank of Vietnam, Vietnam Asset Management Company (VAMC) shall consider authorizing the debt-selling credit institution to undertake one or some operations in Clause 2 Article 12 of Decree No. 53/2013/ND-CP of Vietnam’s Government, specifically as follows:

- Debt recovery, debt collection and handling, sale of debt and collateral;

- Restructuring of debt, adjustment of debt repayment conditions, conversion of debts into contributed capital, the capital stock of the loan customer;

- Investment, repair, upgrade, exploitation, use and lease of collateral whose debts have been collected by the asset management company;

- Management of bad debts bought and checking and monitoring of collateral related to bad debts, including documents and records relating to bad debts and loan guarantee.

The above-mentioned authorization shall be made into an authorization contract, which shall specify at least:

- Names and address of the authorizer and authorized party;

- Contents and scope of authorization;

- Authorization period;

- Rights and obligations of both parties.

VAMC shall select to authorize part or the whole operation in Clause 1 of this Article to the debt-selling credit institution in accordance with Circular No. 19/2013/TT-NHNN and relevant laws.

Within 10 working days from the day on which the authorization contract is signed, the authorized credit institution shall notify its borrowers, debt payers, guarantors, and relevant parties of the contents and operations delegated to the debt-selling credit institution.

Besides, Circular No. 19/2013/TT-NHNN also regulates the inspecting and supervising delegated operations, specifically as follows:

- VAMC shall develop a database and IT system to exchange information with authorized credit institutions in order to supervise them performing the delegated operations as prescribed in Clause 1 Article 39 of this Circular.

- VAMC shall regularly inspect and supervise the authorized credit institutions performing the operations delegated by VAMC in the authorization contract.

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

Thu Ba

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