According to calculations by the State Bank, Asset Management Company (VAMC) will handle approximately 80000-100000 billion of bad debt in the next 5 years. In particular, the VAMC annual turnover of about 60 billion - 160 billion.
State Bank recently announced draft Circular on the purchase, sale, handling bad debts of the company's asset management and credit institutions in Vietnam (VAMC). The draft circular prescribes the conditions VAMC debts by buying special bonds towards specifying the conditions stipulated in Decree 53.
Accordingly, the draft specifies the conditions VAMC debt by buying special bonds include:
First, the debt is secured by assets, in which no less than 65% of the collateral is real estate, including real estate forms in the future.
Second, debt, collateral must be lawful debts are not used to secure other obligations of credit institutions; collateral of the debt is not disputed.
Third, debt, assets secured debt profile; valid documents proving the legitimacy of the debt, collateral.
Fourth, borrowers exist.
Thursday, borrowers with outstanding principal amounts outstanding at the time of sale of not less than 3 billion loan for the customer and the organization is no less than 1 billion loan to an individual customer.
Also at the request of the draft, credit institutions (banks) have NPL ratio from 3% of total credit outstanding to sell more debt to the VAMC. When buying debt by market value, VAMC to perform revaluation of debts of the organization or hired consultants to evaluate loans, collateral.
To buy the market value of debt, the State Bank plans to buy debt in market value is a set of analysis and assessment, suggestions on buying, selling and dealing in original debts market discipline by the asset management company founded and State Bank of consideration, subject to approval in each period.
After buying the debt of credit institutions, VAMC written request 4 state-owned commercial banks, joint-stock commercial banks in which the State owns 50% stake in providing information about rates Lending to banks each term being applied at the time of purchase debt. 4 banks (including Agribank, Vietinbank, Vietcombank, BIDV) have to provide the information specified in paragraph 1 of this Article and is responsible for the accuracy and completeness of data provided.
Asset Management Company shall adjust the interest rate is applied to purchased debt on a level no greater than the average interest rate corresponding to each term of the state-owned commercial banks, Joint-stock commercial banks in which the State owns over 50% stake.
Provisions on loans sold were bought, sold VAMC make loans purchased from banks for organizations and individuals as prescribed by the State Bank of debt purchase and apply for credit. Where the sale of the debt by buying special bonds manner with the purchase agreement, the Company Asset Management have agreed to credit institutions selling price of outstanding debt before.
In particular, the State Bank VAMC requirements when applied in the form of debt sales agreements with buyers, conversion of debts into equity, the equity of the borrower's business must be consistent with creditors before credit sales in order to avoid lack of transparency, the group interests.
After converting debt into equity, equity Asset Management Company sold the capital account, credit equity for debt sold by book value and paying special bond.
To ensure avoiding loss, improper handling of the debt proceeds, circular Asset Management Company must send money for debt recovery in credit institutions sell debt in the form of deposits term and not withdrawn prior to the bond payment.
Every quarter, Asset Management Company shall notify statistics and the amount that credit institutions are entitled to sell debt from the proceeds of your debt to credit institutions recorded in operating revenue . These measures are considered to reduce the cost burden provision for credit institutions.
About proportion Asset Management Company is entitled to recover the amount of debt, circular rate is 2%. As expected, VAMC will handle about 80,000 billion - 100,000 billion bad debt recovery rate is 20% - 40%.
Thus, according to the State Bank, with the rate stipulated enjoy VAMC is equivalent to 2% of the company revenues of 320 billion - 800 billion. With the expected processing time is 5 years, the annual income of Asset Management Company is approximately 60 billion - 160 billion. This rate is expected to be sufficient to cover the annual costs associated with the asset management company.
If passed, Circular takes effect from the date of 07.09.2013, in accordance with the time of entry into force of Decree No. 53.
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