Dr. Nguyen Duc Kien pointed out that the approval of Resolution No.42/2017/QH14 on pilot settlement of bad debts by the National Assembly at its third session has contributed significantly to the macro stability. Up to now, the Resolution worked out effectively.
“It reflected critical changes in the political system as well as the mindset of the economic regulators” emphasized and explained by Dr. Nguyen Duc Kien. For many years, we have simply borrowed from banks to meet demands for funds. If we could not afford to pay due debts, we have delayed the payment or started complaining.
“For the first time Resolution No.42 provides that debts must be paid off. Collaterals are compulsory in the lending conditions. Moreover, payment failure will lead to civil liabilities while social welfare policies will be separately carried out”
Besides, Resolution No.42 facilitates the economy to be driven by the market forces.
“Lots of collaterals were taken in the last 4 months of 2017 with values up to 5000-7000 billion dongs without doing any harm to the social order. In other words, the social order in the areas where the bank collected collaterals was guaranteed. For example, Sai Gon One Tower was successfully recovered with the value of 6.700 billion dongs” quoted and affirmed by Dr. Nguyen Duc Kien. Within 4 month of 2017, the speed of debt recovery got faster which reduced the bad debt ratio in the economy.
Looking back to the years before 2016, bad debts were considered “blood clots” of the economy. However, they have been being removed. The awareness of the customers was therefore enhanced. When customers were alarmed by the bank, they cooperated with the bank to work out solutions.
On 21/5, on behalf of the Government, standing Deputy Prime Minister Truong Hoa Binh delivered a report to the National Assembly assessing the implementation of the socio-economic development. He highlighted that the restructuring of credit institutions along with the bad debt settlement as regulated by the NA’s Resolution and the Law on amending and supplementing a number of articles of the Law on credit institutions has made fruitful results. Weak commercial banks were kept under rigorous control and resolved in accordance with market rules. As of March 2018, the bad debt ratio was 2,18%.