Decree No. 18/2016/ND-CP dated March 18, 2016 of the Government amending, supplementing a number of articles of the Decree No. 53/2013/ND-CP dated May 18, 2013 of the Government on the establishment, organization and operation of Vietnam Asset Management Company

DECREE

Amending and supplementing a number of
articles of the Government’s Decree No. 53/2013/ND-CP of May 18, 2013, on the establishment, organization and operation of the Vietnam Asset Management Company[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institution;

At the proposal of the Governor of the State Bank of Vietnam,

The Government promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 53/2013/ND-CP of May 18, 2013, on the establishment, organization and operation of the Vietnam Asset Management Company.

Article 1. To amend and supplement a number of articles of the Government’s Decree No. 53/2013/ND-CP of May 18, 2013, on the establishment, organization and operation of the Vietnam Asset Management Company, as follows:

1. To amend and supplement Points i and l, Clause 1, Article 13 as follows:

“i/ To enjoy part of the proceeds from the recovery of non-performing loans it has purchased with special bonds at a percentage set by the State Bank of Vietnam after reaching agreement with the Ministry of Finance, minus the amount it has collected under Point l of this Clause, if the proceeds from the recovery of non-performing loans are larger than the amount collected under Point l of this Clause.

If the proceeds are smaller than the amount collected under Point l of this Clause, the Vietnam Asset Management Company is not required to refund the amount collected under Point 1 of this Clause to credit institutions;”

“l/ To annually enjoy part of the period-end outstanding amount of non-performing loans which it has purchased with special bonds and which are currently accounted on its balance sheet at a percentage set by the State Bank of Vietnam after reaching agreement with the Ministry of Finance.

The amounts paid by credit institutions to the Vietnam Asset Management Company under Points i and l of this Clause shall be accounted as expenses of the credit institutions;”

2. To amend and supplement Clause 2, Article 14 as follows:

“2. The Vietnam Asset Management Company shall purchase a non-performing loan from a credit institution at the market value on the basis of agreement and revaluation of such loan.

A credit institution may gradually amortize in its operating expenses the difference between the book value and the traded value of the loan purchased at market value and the value of the risk provision deducted for such loan on the following principles:

a/ The credit institution is suffering loss or will suffer loss if such difference is wholly amortized at a time;

b/ The amortization shall be made over 5 (five) years at most, counting from the time of sale of the loan. The amount to be amortized annually must not be lower than the revenue-expenditure difference (exclusive of the amortized amount).

The Ministry of Finance shall guide in detail this amortization.”

3. To add the following Article 20a after Article 20:

“Article 20a. Extension of special bonds

1. After obtaining the State Bank’s approval, the Vietnam Asset Management Company shall extend the issued special bonds to purchase non-performing loans of credit institutions that are undergoing restructuring or meet financial difficulties. The aggregate of the extended period and initial term of special bonds must not exceed 10 (ten) years from the date of issuance.

2. The State Bank shall specify the extension of special bonds prescribed in Clause 1 of this Article.”

Article 2. Effect

1. This Decree takes effect on March 23, 2016.

2. To annul Clause 3, Article 1 and paragraph “l/ To enjoy part of the period-end outstanding non-performing loan it has purchased with special bonds at a percentage set by the State Bank of Vietnam after reaching agreement with the Ministry of Finance. The amount paid by credit institutions to the Vietnam Asset Management Company under this provisions shall be accounted as expense of the credit institutions,” in Clause 4, Article 1 of the Government’s Decree No. 34/2015/ND-CP of March 31, 2015, amending and supplementing a number of articles of the Government’s Decree No. 53/2013/ND-CP of May 18, 2013, on the establishment, organization and operation of the Vietnam Asset Management Company.

Article 3. Implementation responsibility

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, the chairperson of the Members’ Council and the director general of the Vietnam Asset Management Company, chairpersons of Boards of Directors, chairpersons of Members’ Councils and directors general (directors) of credit institutions, and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG