Trang Chủ
The State Bank of Vietnam is authorized to provide special loans at an interest rate of 0% without collateral to credit institutions facing mass withdrawals to meet depositor demands.
The newly amended Law on CIs revises Clause 1, Article 193, allowing the State Bank of Vietnam (SBV) to grant special loans with or without collateral to CIs experiencing mass withdrawals to pay depositors, or CIs engaging in the implementation of recovery or mandatory transfer plans for CIs placed under special control.
According to the amended Law, the authority to approve special 0% interest loans without collateral is shifted from the Prime Minister to the SBV Governor. In addition, CIs are granted the right to seize collateral assets that meet conditions prescribed by the Government.
Presenting her explanatory report before the National Assembly voted to pass the Law, SBV Governor Nguyen Thi Hong stated that the Government had adjusted the regulations to ensure that special lending from the State Budget is provided solely to credit institutions experiencing liquidity distress (specifically, bank runs that risk triggering insolvency), or to execute recovery or compulsory transfer measures , with the overarching goal of maintaining systemic stability and protecting depositors’ interest.
Rights to seize collateral for non-performing loans
Regarding the seizure of collateral, the amended Law introduces three new articles following Article 198, namely Article 198a (Rights to seize collateral), Article 198b (Attachment of judgment debtors’ assets used as collateral for non-performing loans- NPLs), and Article 198c (Return of collateral used as criminal evidence).
Accordingly, guarantors or custodians of collateral assets securing NPLs are obligated to hand over these assets, along with relevant legal documents, to CIs or debt handling organizations for disposition per security contracts, or other relevant agreements and regulations governing secured transactions.
In cases where the guarantors or custodians refuse to hand over the collateral assets, the CIs or debt handling organizations have the right to seize the assets.
The CIs and debt handling organizations can seize the collateral assets for NPLs only when the following conditions are met: The seizure complies with the Civil Code; the security contract clearly provides that the guarantor agrees to allow the secured party to seize the collateral assets; The collateral is not currently subject to litigation before a competent court; The collateral is not subject to temporary emergency measures, attachment, or enforcement measures under applicable laws; The collateral is not under suspension of disposition in accordance with bankruptcy law and other conditions as regulated by relevant laws, if any.
Prior to seizing the collateral, the CIs or debt handling organizations must publicly disclose information about the assets and reasons for seizure (at least 15 days in advance if the collateral is real estate).
The Government to direct the implementation of the Law to ensure consistency and effectiveness
Prior to National Assembly’s passage, deputies proposed establishing a mechanism for coordination between commune-level People’s Committees and police authorities to ensure the legitimate rights of those whose assets are seized, and retaining 02 provisions from Resolution No. 42 on the pilot resolution of CIs’ NPLs.
In response, Governor Nguyen Thi Hong clarified that the law only regulates the involvement of commune-level People’s Committees and police authorities in the seizure process. This provision aligns with the restructuring of administrative units and the two-tier government structure.
Under the amended Law on CIs, debt handling organizations are authorized to seize collateral assets for NPLs. However, this is only permitted if a prior agreement has been established between the CI and the borrower.
Collateral subject to seizure must not be under dispute in any case that has been accepted by a court but has not yet been resolved or is currently under judicial review.
To prevent abuse of this seizure right, the Law prohibits CIs from applying measures that violate legal prohibitions or social ethics. Collateral assets must satisfy conditions prescribed by the Government.
Governor Nguyen Thi Hong stated that after the passage of the Law, the Government will direct the SBV to coordinate with relevant agencies to review, evaluate, and propose measures for the effective and consistent implementation of the Law.
The Law on amendments and supplements to a number of articles of the Law on CIs will take effect on October 15, 2025.
Department of Research and International Cooperation (translation)
