Central bank of Vietnam: restructuring of banks needs legal framework
Vietnam will step up the restructuring of the banking sector this year but this process will require certain regulations to be revised to create a favorable legal framework, the governor of the State Bank of Vietnam said. Le Minh Hung said at a VietinBank 2017 business plan meeting in Hanoi on January 9 that a legal framework should be designed in a way that facilitates the settlement of bad debts and the restructuring of the banking system. The SBV will coordinate with relevant agencies to build a law on settlement of bad debt and restructuring of banks, he noted. The law, Hung said, would provide regulations for dealing with ailing banks that must be restructured and there should be regulations on settlement of bad debt too. The central bank will seek approval from the National Assembly to add regulations on confiscation of assets used as collateral for bank loans that have turned bad. If NA approval is given, this impediment to settlement of bad debt could be removed. Hung said the SBV had written to the Supreme People’s Court and the Supreme People’s Procuracy asking them to consider adjusting rules in a way that makes it convenient to cope with mortgaged assets.
