State Bank of Vietnam submits draft Credit Institutions Law amendments to codify bad debt resolution and transfer special lending powers to the central bank

The State Bank of Vietnam has presented to the National Assembly a draft law to amend the Law on Credit Institutions, focused on putting into statute key mechanisms used to resolve non-performing loans and on accelerating crisis liquidity support by moving decision-making on “special loans” from the Prime Minister to the central bank. The draft would amend Article 193(1) to allow the State Bank of Vietnam to decide special loans, with or without collateral, at an interest rate of 0% per year. It would also add Articles 198a–198c to support bad debt workouts, including a right for credit institutions and debt trading and handling organisations to seize collateral where the security contract permits and where transparent procedures are followed, plus requirements for internal rules to protect the rights of relevant parties. Further provisions would limit when enforcement authorities can attach assets that are collateral for a bad-debt loan and require procedural authorities to return case exhibits or seized items that are collateral for bad-debt loans where this does not affect case handling, with subsequent collateral processing to follow applicable law. The National Assembly Standing Committee has concluded the legislative file meets requirements and can be considered at the 9th session of the 15th National Assembly under a single-session, expedited legislative process.