Vietnam: Notes on transfer of rights and interests associated with bad debts

17:14, 09/09/2013

The Governor of the State Bank of Vietnam issued Circular No. 19/2013/TT-NHNN on the purchase, sale, and settlement of bad debts of Vietnam Asset Management Company.

According to Circular No. 19/2013/TT-NHNN of the State Bank of Vietnam, upon purchase of bad debts of Vietnam Asset Management Company (VAMC), rights and interests associated with bad debts shall be transferred as follows:

chuyen giao quyen, loi ich lien quan den khoan no xau, Thong tu 19/2013/TT-NHNN

- When bad debt is sold, all rights and interests associated with the bad debt, collateral, and other security measures shall be preserved and transferred to the debt buyer under the debt purchase contract.

- When VAMC and the credit institution reach agreement on adjusting the security conditions of the bad debt, a written approval of the borrower and guarantor shall be obtained.

Besides, purchase and sale of bad debts between VAMC and credit institutions shall comply with the principles specified in Circular No. 19/2013/TT-NHNN, specifically as follows:

- Transparency.

- Compliance with law and the debt purchase contract.

- Limitation of risks and expenses during bad debt purchase.

- The purchase shall be made with regard to each bad debt or borrower (if a borrower has multiple bad debts at a credit institution), or group of borrowers (if an asset is put up as collateral for multiple bad debts of multiple borrowers at a credit institution) or in other legitimate methods agreed by both parties.

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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