Illustrative image (Source: VNA)Hanoi (VNA) - Experts from the World Bank have made four key recommendationsto resolve Vietnam’s problem of non-performing loans (NPLs).
The four suggestions are modernisation of the financial sector; promotion ofbank regulations and supervision; restructuring and resolution of sub-standardbanks and assets; and enhancement of macro safety supervision.
The suggestions were shared at a meeting between Ceyla Pazabassiouglu, seniordirector of Finance and Markets Global Practice, World Bank Group, and StateBank of Vietnam (SBV)’s representatives in Hanoi earlier this week.
The World Bank believes that these four recommendations, which are allnecessary and will support each other, will contribute towards helping resolvethe issue of NPLs.
With stronger participation of the Government and the National Assembly, Vietnammust map out effective policies to tackle the NPL problem and restructurecredit institutions, it said.
Experts said that NPL management is a complex issue that will involve manyagencies and bodies such as the ministries of finance, justice, planning andinvestment, banks, as well as supervisory, tax and auditing bodies.
If bad debts are not fully resolved, the economy will stagnate and lending willdecline. Besides, commercial banks will not operate effectively, which can leadto loss of liquidity and cause chain disruption in the banking system. The needof the hour is cooperation of the public sector linked to bad debt managementand resolution.
The World Bank said it has designed a four-year technical cooperation programmeto help Vietnam resolve the issue of NPLs. Negotiations is underway with donorsfor the programme’s capital source.
At the meeting, SBV deputy governor Nguyen Kim Anh said the restructuring ofcredit institutions and resolution of NPLs have been a priority for the Governmentand the SBV since the past few years.
The SBV has shared a scheme on restructuring the system of credit institutionsand resolving weak credit institutions with the Political Bureau. It has beensubmitted to the National Assembly for a resolution on resolving NPLs (it isexpected to be approved in June) and a draft law to the National Assembly onrevising a number of articles in the Law on Credit Institutions, Anh said.
However, Anh said, there are still many challenges to resolving the bad debtproblem, and the central bank needs to learn from other countries’ experienceand calls for support and advice from international organisations, includingthe World Bank, to meet the target of restructuring the banking system andresolving the NPL issue in the 2016-20 period.-VNA
The four suggestions are modernisation of the financial sector; promotion ofbank regulations and supervision; restructuring and resolution of sub-standardbanks and assets; and enhancement of macro safety supervision.
The suggestions were shared at a meeting between Ceyla Pazabassiouglu, seniordirector of Finance and Markets Global Practice, World Bank Group, and StateBank of Vietnam (SBV)’s representatives in Hanoi earlier this week.
The World Bank believes that these four recommendations, which are allnecessary and will support each other, will contribute towards helping resolvethe issue of NPLs.
With stronger participation of the Government and the National Assembly, Vietnammust map out effective policies to tackle the NPL problem and restructurecredit institutions, it said.
Experts said that NPL management is a complex issue that will involve manyagencies and bodies such as the ministries of finance, justice, planning andinvestment, banks, as well as supervisory, tax and auditing bodies.
If bad debts are not fully resolved, the economy will stagnate and lending willdecline. Besides, commercial banks will not operate effectively, which can leadto loss of liquidity and cause chain disruption in the banking system. The needof the hour is cooperation of the public sector linked to bad debt managementand resolution.
The World Bank said it has designed a four-year technical cooperation programmeto help Vietnam resolve the issue of NPLs. Negotiations is underway with donorsfor the programme’s capital source.
At the meeting, SBV deputy governor Nguyen Kim Anh said the restructuring ofcredit institutions and resolution of NPLs have been a priority for the Governmentand the SBV since the past few years.
The SBV has shared a scheme on restructuring the system of credit institutionsand resolving weak credit institutions with the Political Bureau. It has beensubmitted to the National Assembly for a resolution on resolving NPLs (it isexpected to be approved in June) and a draft law to the National Assembly onrevising a number of articles in the Law on Credit Institutions, Anh said.
However, Anh said, there are still many challenges to resolving the bad debtproblem, and the central bank needs to learn from other countries’ experienceand calls for support and advice from international organisations, includingthe World Bank, to meet the target of restructuring the banking system andresolving the NPL issue in the 2016-20 period.-VNA
VNA
