Vietnam Central Bank, WB Hold Workshop to Address Bad Debt Problem

The State Bank Vietnam (SBV) and the World Bank Tuesday jointly organized a workshop to find ways to clear bad debt in the local banking system, the SBV said.

The workshop, themed Non-Performing Loan Resolution in Vietnam: Reducing Risks in the Banking Sector and Improving Economic Prospects, was attended by the SBV deputy governor Nguyen Thi Hong and Achim Fock, Portfolio & Operations Manager in the WB office in Vietnam, among others.

It is necessary to restructure the system of credit institutions along with the handling of nonperforming loans in the 2016-2020 period, paving the way for the safe and sustainable development of the credit institution system through 2020, Ms. Hong said.

The workshop addressed such key issues as NPL supervision, approaches for clearing NPLs, other countries’ experience in dealing with NPLs and developing market for collaterals related to NPLs, the SBV said.

Attendants at the workshop agreed that Vietnam has made initial progress in dealing with NPLs, reducing the ratio of NPLs on total outstanding loans to 2.55% by the end of 2015.

However, they were concerned that NPLs are still posing risks to the operations of credit institutions in Vietnam, while the mechanism for cleaning NPLs remains weak and incomplete.

VTK