At the National Assembly Standing Committee’s 44th session, the State Bank of Vietnam presented the government’s draft amendments to the Law on Credit Institutions that would embed several mechanisms from Resolution 42/2017 on non-performing loan resolution, notably creditor rights to seize collateral, and would shift approval powers for special loans such as unsecured lending and zero-interest-rate loans from the Prime Minister to the State Bank of Vietnam. The Standing Committee agreed in principle with the proposed policies and indicated the dossier is ready to be submitted to the National Assembly’s 9th session under an expedited, single-session process. The government linked the proposal to rising bad debts after Resolution 42 expired following a seven-year pilot and two extensions, arguing that a further pilot resolution would be inappropriate. On collateral seizure, the draft frames the right as contract-based rather than unconditional, sets conditions and procedures, prohibits unlawful or socially unethical measures, and would require credit institutions to adopt internal rules, with oversight by local authorities and police to prevent abuse. Lawmakers called for tighter scoping to loans originated in compliance with lending rules, clearer roles for commune-level People’s Committees and police in supervising seizures, and further impact analysis of rules affecting attachment of secured assets in civil judgment enforcement and the rights of third parties. Before the bill advances, the government was asked to seek the required higher-level approvals on transitional arrangements for zero-interest special loans before and after the amended law takes effect and on legislating three Resolution 42 policies, covering collateral seizure, treatment of secured assets in enforcement, and return of property used as evidence in criminal and administrative cases. The government also indicated it would issue a detailed implementing decree once the amendments are passed.
State Bank of Vietnam 2025-04-25
State Bank of Vietnam presents Credit Institutions Law amendments to codify Resolution 42 bad-debt powers and decentralise special-loan approvals
The State Bank of Vietnam proposed draft amendments to the Law on Credit Institutions, incorporating mechanisms from Resolution 42/2017 on non-performing loan resolution, including creditor rights to seize collateral. The amendments suggest shifting approval powers for special loans from the Prime Minister to the State Bank. The National Assembly Standing Committee agreed in principle, linking the proposal to rising bad debts and emphasizing the need for oversight and clearer roles in collateral seizure processes.