State Bank of Vietnam Governor Nguyen Van Binh this week issued adirective on classification of restructured debts to ensure that creditinstitutions perform safely and more effectively.
Under the directive, the Governor requires credit institutions torestructure loan repayment periods and keep loan groups on the basis ofassessing the conditions for production, business and service supply, aswell as the ability to repay debts; and to inspect and strictly controlrestructured debts to ensure that borrowers can repay the debts inaccordance with restructured repayment period.
Creditinstitutions will not restructure the repayment period and maintain loangroups for customers that use funds for improper purposes or violateprovisions of the credit agreements and related regulations.
The lenders can actively decide to restructure the repayment period onthe basis of monitoring and assessing customers' business conditionsand financial strength.
Additionally, they cansimultaneously reconsider interest rates in line with the financialconditions of borrowers, of credit institutions and the actual monetarymarket to support customers in overcoming difficulties in production andbusiness.
They can also only restructure therepayment period and keep loan groups for clients unable to repay theprincipal or interest within the terms of the loan or when due, if theyhave new feasible business plans, and is determined that they have abetter ability to repay the debts once the debt repayment period isadjusted.
At the same time, the institutions will haveto promulgate internal regulations for restructuring debts to ensureunity in implementation; have internal control mechanisms to ensurecontrol strictly and safely to prevent violations.
Besides reporting internal regulations and internal control mechanismsto the central bank, the institutions must also build and report theirdeployment plans and implementation commitments.
Underthe directive, the Governor also requires the supervising agencies ofthe central bank and its branches nationwide to better monitor creditinstitutions to ensure they obey regulations and provide timelysolutions to remove the barriers faced by lenders and borrowers.-VNA
Under the directive, the Governor requires credit institutions torestructure loan repayment periods and keep loan groups on the basis ofassessing the conditions for production, business and service supply, aswell as the ability to repay debts; and to inspect and strictly controlrestructured debts to ensure that borrowers can repay the debts inaccordance with restructured repayment period.
Creditinstitutions will not restructure the repayment period and maintain loangroups for customers that use funds for improper purposes or violateprovisions of the credit agreements and related regulations.
The lenders can actively decide to restructure the repayment period onthe basis of monitoring and assessing customers' business conditionsand financial strength.
Additionally, they cansimultaneously reconsider interest rates in line with the financialconditions of borrowers, of credit institutions and the actual monetarymarket to support customers in overcoming difficulties in production andbusiness.
They can also only restructure therepayment period and keep loan groups for clients unable to repay theprincipal or interest within the terms of the loan or when due, if theyhave new feasible business plans, and is determined that they have abetter ability to repay the debts once the debt repayment period isadjusted.
At the same time, the institutions will haveto promulgate internal regulations for restructuring debts to ensureunity in implementation; have internal control mechanisms to ensurecontrol strictly and safely to prevent violations.
Besides reporting internal regulations and internal control mechanismsto the central bank, the institutions must also build and report theirdeployment plans and implementation commitments.
Underthe directive, the Governor also requires the supervising agencies ofthe central bank and its branches nationwide to better monitor creditinstitutions to ensure they obey regulations and provide timelysolutions to remove the barriers faced by lenders and borrowers.-VNA
