The SBV has a framework in place for dealing with bad debts for the Project

DNHN - The plan was designed in accordance with Decision No. 689/QD-TTg and the Scheme's contents, carefully following the views, orientations, aims, tasks, and solutions to reorganize the credit institution handling system. Decision No. 689/QD-TTg and Scheme specify the bad debt management period 2021-2025.

The governor of the State Bank of Vietnam has released the Banking Sector Action Plan for the period 2021-2025 to undertake the Project "Restructuring the System of Credit Institutions Associated with Debt Settlement" (Action plan of the banking sector).

The Action Plan's purpose is to implement the State Bank's direction to the banking industry units in organizing the implementation of the objectives, tasks, and solutions for restructuring the system of credit institutions (CIs) associated with bad debt settlement in the 2021-2025 period specified in Prime Minister's Decision No. 689/QD-TTg dated June 8, 2022.

In which the plan is built under Decision No. 689/QD-TTg and the Scheme's contents, closely following the viewpoints, orientations, objectives, tasks, and solutions to restructure the system of credit institutions associated with bad debts for the period 2021-2025 mentioned in Decision No. 689/QD-TTg and the Scheme; maintain the proactive spirit, efforts of each unit, and cooperation and coordination between units within and outside the banking industry to be determined to effectively implement the set goals, tasks and solutions.

Concerning tasks, solutions, and unit division: Improving the legislative framework for currency, banking operations, reorganizing the credit institution system, and dealing with bad debts based on complete conformity with market economy rules, international practices, and Vietnam's conditions.

Simultaneously, there are solutions to help with monetary policy management. Increasing the effectiveness of banking inspection and oversight; Improving the banking inspection and supervision team's capabilities and quality; Improving communication skills.

To increase the efficiency and operational quality of the credit institution system, it is required to improve financial capacity, credit quality, operational efficiency, business administration, and transparency in credit institution operations.

Simultaneously, update the bank and increase its competitiveness. Creating a digital banking model and putting the Banking Sector Digital Transformation Plan into action; The advancement of cashless payments; Continuing applying and implementing Basel II; Creating a credit institution network; Improving the efficiency with which credit capital is allocated; Encouraging green financing, green banking, and investment in low-carbon manufacturing and consumer industries. Non-credit service activity development

Furthermore, the Banking Sector Action Plan includes specific provisions on handling bad debts, such as: handling bad debts, improving credit quality for credit institutions; improving VAMC's financial capacity and operational efficiency; and specifying specific and detailed solutions for each group/block of credit institutions.

PV