Decree 304/2025/ND-CP conditions applicable to collateral for non-performing loans subject to seizure

DECREE

On conditions applicable to collateral for non-performing loans subject to seizure

Pursuant to the Law on Organization of the Government No. 63/2025/QH15;

Pursuant to the Law on Credit Institutions No. 32/2024/QH15, amended and supplemented under Law No. 96/2024/QH15;

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

The Government hereby promulgates the Decree on conditions applicable to collateral for non-performing loans subject to seizure.

Article 1. Scope of regulation

This Decree provides conditions applicable to collateral for non-performing loans that are subject to seizure under Point dd, Clause 2, Article 198a of the Law on Credit Institutions No. 32/2024/QH15, which was amended and supplemented under Law No. 96/2025/QH15.

Article 2. Subjects of application

1. Credit institutions.

2. Foreign bank branches.

3. Institutions with 100% charter capital owned by the State and having the function of debt trading and handling (hereinafter referred to as debt trading and handling institutions).

4. Relevant agencies, organizations and individuals.

Article 3. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Sole residence means the lawful residence of an individual securing party and satisfies the following conditions:

a) Being asset under the ownership of the securing party;

b) Being the place where the securing party has registered permanent residence or temporary residence;

c) If the collateral being seized is the sole residence, the securing party has no other residence.

2. Primary or sole means of labor means a movable asset used as the primary or sole means of livelihood of an individual securing party and satisfies the following conditions:

a) At the time prescribed in Clause 1, Article 5 of this Decree, the means of labor has a value not exceeding 24 months of salary calculated according to the minimum wage level specified at Point b, Clause 2 of this Article;

b) If the collateral being seized is the primary or sole means of labor, the securing party does not have sufficient minimum income equal to the region-based minimum wage level of the locality where the securing party is actually residing, in accordance with the Government’s regulations on minimum wage levels applicable to employees working under labor contracts.

Article 4. Conditions applicable to collateral for non-performing loans subject to seizure

1. Collateral for a non-performing loan that is the sole residence or the primary or sole means of labor shall be subject to seizure only upon satisfaction of the conditions set forth in Points a, b, c, d, and e, Clause 2, Article 198a of Law No. 32/2024/QH15, which was amended and supplemented under Law No. 96/2025/QH15, and upon satisfaction of one of the following conditions:

a) In case of seizure of a sole residence that has been verified and substantiated in accordance with Clause 1, Article 5 of this Decree, the secured party shall remit to the securing party an amount equal to 12 months of wages calculated on the basis of the minimum wage level prescribed in Clause 2, Article 3 of this Decree;

b) In case of seizure of the primary or sole means of labor that is not formed from loan proceeds and that has been verified and substantiated in accordance with Clause 1, Article 5 of this Decree, the secured party shall remit to the securing party an amount equal to 06 months of wages calculated on the basis of the minimum wage level prescribed in Clause 2, Article 3 of this Decree.

2. Collaterals for a non-performing loan other than those specified in Clause 1 of this Article shall be subject to seizure upon satisfaction of the conditions prescribed at Points a, b, c, d, and e, Clause 2, Article 198a of Law No. 32/2024/QH15, which was amended and supplemented under Law No. 96/2025/QH15.

Article 5. Rights and responsibilities of the securing party

1. Under the security agreement or another written document, the securing party shall undertake to verify and substantiate, upon the request of the secured party, whether the collateral falls within or outside the cases prescribed in Clause 1, Article 4 of this Decree, within 10 working days from the date of receipt of the secured party’s request. The method of transmitting such request shall be carried out in accordance with Point d, Clause 3, or Point c, Clause 4, Article 198a of Law No. 32/2024/QH15, which was amended and supplemented under Law No. 96/2025/QH15.

2. Where the securing party fails to verify and substantiate in accordance with Clause 1 of this Article, the collateral being a residence or means of labor shall be deemed not to fall within the cases prescribed in Clause 1, Article 4 of this Decree.

3. The securing party shall be responsible for the contents of the verification and the accuracy and legality of the supporting documents submitted in accordance with Clause 1 of this Article, including:

a) Certificates of ownership over the collateral and other assets (if any);

b) Bank account statements reflecting the securing party’s monthly income;

c) Documents evidencing the performance of the securing party’s personal income tax obligations;

d) Electricity, water, or Internet invoices reflecting the securing party’s permanent or temporary residence address;

dd) Other supporting documents.

Article 6. Rights and responsibilities of credit institutions, foreign bank branches, and debt trading and handling institutions

1. To provide the securing party with full information concerning the rights and responsibilities of the securing party and the rights and responsibilities of the secured party as prescribed in this Decree.

2. To remit to the securing party the monetary amounts specified in Clause 1, Article 4 of this Decree, which shall be accounted for as expenses in the process of handling the collateral.

3. To carry out the seizure of collateral upon satisfaction of the conditions prescribed in Article 4 of this Decree, or carry out the seizure of collateral falling within the cases prescribed in Clause 2, Article 5 of this Decree upon satisfaction of the conditions prescribed in Clause 2, Article 4 of this Decree.

The seizure of collateral shall be conducted in accordance with Clauses 3, 4, 5, 6, and 7, Article 198a of Law No. 32/2024/QH15, which was amended and supplemented under Law No. 96/2025/QH15.

Article 7. Effect and implementation responsibility

1. This Decree takes effect from December 01, 2025.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and relevant agencies, organizations and individuals shall implement this Decree.

Article 8. Transitional provisions

For security agreements or other written arrangements executed before the effective date of this Decree, the collateral for non-performing loans shall be subject to seizure upon satisfaction of the conditions prescribed in this Decree.