Decision No. 02/2025/QD-TTg On the mechanism for handling credit risks at the Vietnam Development Bank

Pursuant to …;
On the mechanism for handling credit risks at the Vietnam Development Bank

________

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on state investment credit; Decree No. 78/2023/NĐ-CP dated November 7, 2023 amending and supplementing certain articles of Decree No. 32/2017/NĐ-CP of the Government on state investment credit;

Pursuant to Decree No. 46/2021/NĐ-CP dated March 31, 2021 of the Government on financial management systems and performance evaluation for the Vietnam Development Bank;

At the proposal of the Minister of Finance;

The Prime Minister promulgates this Decision on the mechanism for handling credit risks at the Vietnam Development Bank.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decision stipulates the mechanism for handling credit risks concerning loans that the Vietnam Development Bank (hereinafter referred to as the Vietnam Development Bank) bears credit risk during its operations, including:

1. State investment credit loans and export credit loans.

2. Compulsory guarantee loans for small and medium-sized enterprises borrowing from commercial banks.

3. Other loans that the Vietnam Development Bank bears credit risk.

Article 2. Applicability

1. The Vietnam Development Bank.

2. Credit customers of the Vietnam Development Bank within the scope regulated by Article 1 of this Decision.

3. Other organizations and individuals related thereto.

Article 3. Explanation of Terms

In this Decision, the following terms shall be understood as follows:

1. "State investment credit loans and export credit loans" include:

a) Loans according to the Government's regulations on state investment credit policies;

b) Export credit loans of the State under contracts signed before the effective date of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on state investment credit (hereinafter referred to as Decree No. 32/2017/NĐ-CP);

c) Loans under programs and projects assigned by the Government or the Prime Minister, for which the Vietnam Development Bank receives interest subsidies and/or management fees from the state budget;

d) Loans received by the Vietnam Development Bank upon transfer from predecessor organizations.

2. "Compulsory guarantee loans" are loans that the Vietnam Development Bank must take over after providing guarantees for small and medium-sized enterprises borrowing from commercial banks pursuant to the Prime Minister's decision on the guarantee mechanism for such enterprises.

3. "Other loans" include:

a) Loans made by the Vietnam Development Bank to refinance foreign government loans for which the Vietnam Development Bank bears credit risk;

b) Other loans of the Vietnam Development Bank with agreed interest rates not subsidized by the state budget for interest and management fees.

4. "Credit risk" is the possibility of losses occurring in the Vietnam Development Bank's credit activities due to borrowers being unable to fulfill their loan repayment obligations (principal and interest) as stipulated in the Loan Contract or the Guaranteed Debt Contract or Compulsory Guaranteed Debt Contract in accordance with the law on the Vietnam Development Bank's guarantee for enterprises borrowing from commercial banks (hereinafter referred to as the Guaranteed Debt Contract) signed with the Vietnam Development Bank.

5. "Handling credit risk" refers to the Vietnam Development Bank transferring the monitoring of such loans to off-balance sheet accounts or selling the loans in accordance with this Decision.

6. "Transferring to off-balance sheet accounts" is a form of changing accounting treatment for loans, moving risk-bearing loans to off-balance sheet accounts; it is an internal process of the Vietnam Development Bank; it does not change the borrower's obligation to repay the loan transferred to off-balance sheet accounts or the responsibility of related organizations and individuals.

7. "Selling debt" is the act of the Vietnam Development Bank transferring ownership of the loan and related rights to the buyer and receiving payment from the buyer through a Debt Purchase Contract.

8. "Debt sale price" is the amount the buyer must pay the Vietnam Development Bank under the Debt Purchase Contract signed by both parties in accordance with this Decision and relevant laws.

9. "Debt buyer" is any organization or individual purchasing debt from the Vietnam Development Bank in accordance with the law.

10. "Book value of the loan" is the book value of the principal balance, interest balance, and other financial obligations related to the loan (if any) for loans currently accounted for on-balance sheet or off-balance sheet, or the value monitored in the Vietnam Development Bank's management system for loans that have been removed from off-balance sheet accounting in accordance with this Decision.

Article 4. Principles for Handling Credit Risks

1. The handling of credit risks by the Development Bank must be carried out in accordance with the provisions of the law; ensuring all necessary conditions, documents, and materials as stipulated in this Decision and relevant laws.

2. The handling of credit risks by the Development Bank must involve the responsibility of the Development Bank, borrowers, and other organizations and individuals involved in lending, debt recovery, and debt resolution.

3. Organizations and individuals who violate the law causing credit risks or violations during the process of handling risky debts shall bear responsibility according to this Decision and relevant laws.

4. The Development Bank uses credit risk reserves to handle risks in accordance with the provisions of this Decision and relevant laws.

Article 5. Authority to Decide on Handling Credit Risks

The Board of Directors of the Development Bank shall examine and decide on the following matters:

1. Approving the consolidated report on the results of debt recovery using reserves to handle credit risks, including detailed reports on the results of debt recovery from collateral disposal and clearly stating the basis for approval.

2. Approving the classification of debts that have been handled using reserves to address credit risks.

3. Approving measures for debt recovery using reserves to handle credit risks throughout the system, including the disposal of collateral.

4. Using reserves to transfer the monitoring of non-performing loans to off-balance sheet status.

5. Writing off non-performing loans from the off-balance sheet and selling loans valued lower than the remaining principal balance that has not been recovered according to this Decision.

6. Selling loans recorded on the balance sheet or off-balance sheet at prices equal to or higher than the remaining principal balance that has not been recovered, and selling loans that have been written off from the off-balance sheet.

7. Writing off unrecovered interest on loans from the off-balance sheet for cases where borrowers are organizations that have been declared bankrupt or dissolved according to the law, and after liquidation and disposal of all assets, or individuals who have been declared dead or missing according to the law and their estates and obligations have been fully resolved according to the law.

Article 6. Principles for Using Reserves to Handle Credit Risks

1. The Development Bank uses reserves to handle credit risks in accordance with this Decision.

2. For loans under new credit investment agreements signed from December 22, 2023: The Development Bank uses credit risk reserves established in accordance with Decree No. 78/2023/NĐ-CP dated November 7, 2023, of the Government amending and supplementing certain articles of Decree No. 32/2017/NĐ-CP (hereinafter referred to as Decree No. 78/2023/NĐ-CP) and any subsequent amendments, supplements, or replacements to handle credit risks. The principle of using reserves to handle credit risks follows the legal provisions on establishing and using reserves to handle credit risks and selling debts, similar to commercial banks.

3. For loans under new credit investment agreements signed before December 22, 2023, export credit loans of the State, and mandatory guarantee loans: The Development Bank uses credit risk reserves established in accordance with Clause 1, Article 16 of Decree No. 46/2021/NĐ-CP dated March 31, 2021, of the Government on financial management systems and performance evaluation of the Development Bank (hereinafter referred to as Decree No. 46/2021/NĐ-CP) and any subsequent amendments, supplements, or replacements to handle credit risks in accordance with this Decision.

4. For other loans: The Development Bank uses credit risk reserves established in accordance with Clause 2, Article 16 of Decree No. 46/2021/NĐ-CP and any subsequent amendments, supplements, or replacements to handle credit risks in accordance with this Decision.

Article 7. Principles for handling losses related to assets in relation to debts

In cases where there are losses related to assets concerning debts, the Development Bank shall examine and handle according to the following principles:

1. Handle collateral assets (if any) in accordance with the agreement of the parties and the provisions of the law.

2. Determine the cause, responsibility, and handle losses related to assets concerning debts from the following sources:

a) In cases where the loss is due to subjective reasons, the collective or individual causing the loss must compensate according to the provisions of the law;

b) In cases where the asset has been insured, handle according to the insurance contract;

c) Use the reserve extracted in expenses to offset the loss according to the relevant laws and regulations, except for cases stipulated in Article 8 of this Decision;

d) The value of the loss after being offset by compensation from the collective, individual, insurance organization, and using the reserve extracted in expenses, if insufficient, will be offset by the financial reserve fund of the Development Bank according to the provisions of the law. If the financial reserve fund is insufficient to offset the loss, the shortfall will be recorded as other expenses of the Development Bank for the period.

Chapter II
SPECIFIC PROVISIONS

Section 1
TRANSFER TO NON-PERFORMANCE MONITORING

Article 8. Principles and documents for transferring to non-performance monitoring

1. The Development Bank uses reserves to transfer to non-performance monitoring in the following cases:

a) Debts of customers who are organizations declared bankrupt or dissolved according to the law;

b) Debts of individual customers declared missing or deceased according to the law;

c) Debts of customers classified as group 5 according to the State Bank of Vietnam's regulations on classifying assets and off-balance sheet commitments at the Development Bank.

2. Principles for using reserves to transfer to non-performance monitoring:

a) For cases where the Development Bank has handled collateral assets according to the law to recover debts but has not recovered the full amount of the loan, the Development Bank uses reserves according to the principle stipulated in Article 6 of this Decision to transfer the remaining principal balance of the debt to non-performance monitoring;

b) For loans under credit investment contracts signed for the first time from December 22, 2023, which have not yet had collateral assets handled to recover debts, the Development Bank uses reserves to transfer to non-performance monitoring according to the regulations applicable to commercial banks;

c) For loans under credit investment contracts signed for the first time before December 22, 2023, state export credit loans, mandatory guarantee loans, and other loans that have not yet had collateral assets handled to recover debts, the Development Bank uses reserves to transfer the remaining principal balance of the debt to non-performance monitoring, promptly proceeding to handle collateral assets according to the Credit Agreement/Debt Acknowledgment Contract and Guarantee Contract already signed, this Decision, and relevant legal provisions to recover debts;

3. The Development Bank shall not notify the customer about the use of reserves to transfer the debt to non-performance monitoring.

4. Documents for transferring to non-performance monitoring include:

a) Loan documentation and debt collection documentation for debts handled with reserves to manage credit risks: Original or certified copy or certified true copy of the Development Bank;

b) Collateral asset documentation and other related documents (if any): Original or certified copy or certified true copy of the Development Bank;

c) Decision or approval of the Board of Directors of the Development Bank regarding the classification results of the debt handled with reserves to manage credit risks: Original or certified copy;

d) Decision or approval of the Board of Directors of the Development Bank regarding the use of reserves to manage credit risks: Original;

đ) In cases where the customer is an organization or enterprise declared bankrupt or dissolved, in addition to the documents mentioned in points a, b, c, and d of this clause, there must be an original or certified copy or certified true copy from the original of the Court's decision declaring bankruptcy or the dissolution decision of the enterprise according to the law;

e) In cases where the customer is an individual declared dead or missing, in addition to the documents mentioned in points a, b, c, and d of this clause, there must be an original or certified copy of the death certificate or extract from the death registration or declaration of disappearance according to the law;

g) Other documents (if any) as required by the Development Bank's management.

Article 9. Monitoring transferred non-performing debt and removing debt from non-performing status

1. After transferring debt to non-performing status, the Development Bank shall continue to monitor and take comprehensive and thorough measures to recover such debt in accordance with risk management regulations, except for cases where the Development Bank sells the debt to organizations or individuals who fully collect the sale proceeds according to the Debt Purchase Contract stipulated in this Decision after using reserves to transfer the debt to non-performing status.

2. After a minimum period of five years from the date of transferring debt to non-performing status and after implementing all recovery measures without success, the Board of Directors of the Development Bank shall consider and decide on the removal of the debt from non-performing status (excluding debts sold in accordance with this Decision) upon satisfying the following conditions:

a) Having documentation proving that all recovery measures have been implemented but the debt has not been recovered;

b) Having complete documentation identifying the subjective and objective reasons and the responsibility of related organizations and individuals in handling the loss of assets of the Development Bank when removing the debt from non-performing status;

c) Being reviewed and agreed by the Development Bank's Supervisory Board with the proposal of the Development Bank's Board of Directors.

3. Before considering and deciding on the removal of debt from non-performing status, the Development Bank's Board of Directors shall be responsible for compiling a list of debts expected to be removed from non-performing status (if any) in batches (at least once every year) and submitting it to the Ministry of Finance for written comments from the Ministry of Planning and Investment, the State Bank of Vietnam, and relevant agencies within a maximum of 90 working days from the date of receiving complete documents as prescribed. The report sent by the Development Bank to the Ministry of Finance includes the following main contents:

a) The current status of the debt expected to be removed from non-performing status: Name of the borrowing project/borrower, loan period, date of transferring to non-performing status; the current status of debt recovery (principal and interest) of the loan, remaining unrecovered debt at the time of requesting removal from non-performing status; the impact of removing the debt from non-performing status on the financial situation of the Development Bank;

b) Legal status of the borrower; financial condition of the borrower based on the most recent annual financial report audited by an independent auditing company as required by law (except in cases where the borrower has gone bankrupt, dissolved according to the law or ceased operations confirmed by the competent authority); borrowing situation of the borrower from other credit institutions (if any); credit relationship information of the borrower provided by the National Credit Information Center (CIC) at the time of requesting removal;

c) Measures used to recover the loan after transferring to non-performing status and documentation proving that all recovery measures have been implemented but the debt has not been recovered;

d) Determination of subjective and objective reasons and the responsibility of related organizations and individuals in handling the loss of assets of the Development Bank when removing the debt from non-performing status;

đ) The review opinion of the Development Bank's Supervisory Board and the Development Bank's Board of Directors regarding the fulfillment of the conditions for removal from non-performing status and other opinions (if any);

e) Other contents as required by management (if any).

4. Debts removed from non-performing status must be monitored by the Development Bank in its management system in accordance with legal provisions on setting aside and handling inventory write-down reserves, investment losses, difficult-to-collect receivables, and warranty products, goods, and construction services at enterprises for a minimum period of ten years from the date the debt was removed from non-performing status according to the decision of the Development Bank's Board of Directors, except for debts where the borrower is an organization that has gone bankrupt or dissolved according to the law and after liquidating and disposing of all assets, or the borrower is an individual determined dead or missing according to the law and has completed the settlement of their estate and obligations according to the law, or non-performing debts that have completed the debt sale procedures and financial treatment upon sale according to Article 14 of this Decision. The Development Bank is responsible for monitoring and recovering debts that have been removed from non-performing status (excluding debts sold in accordance with this Decision).

5. Documentation for removing debt from non-performing status includes:

a) Documentation for transferring debt to non-performing status as prescribed in Clause 4, Article 8 of this Decision;

b) Documentation and materials on removing debt from non-performing status submitted for comments from the Ministry of Finance and relevant agencies as prescribed in Clause 3 of this Article: Original or certified copy or certified true copy of the Development Bank;

c) Decision of the Development Bank's Board of Directors on removing debt from non-performing status after the Ministry of Finance provides written comments as prescribed in this Article: Original;

d) Decisions or approvals of measures to recover debt for debts that have been handled with reserve usage to manage risks;

đ) Documentation proving that all recovery measures have been implemented but the debt has not been recovered, consistent with reality and relevant legal regulations.

6. Documentation on removing debt from non-performing status, after being approved by the competent authority in accordance with the law, must be permanently retained by the Development Bank in accordance with the law.

Article 10. Handling the amount of money recovered from debts transferred to off-balance sheet monitoring

The amount of money recovered from debts transferred to off-balance sheet monitoring (including the amount recovered from the disposal of collateral assets and the amount recovered from debts that have been removed from the off-balance sheet) shall be recorded in accordance with the legal regulations on the financial management regime of the Development Bank.

Section 2
SALE OF DEBTS

Article 11. Sale of Debts

1. The Board of Directors of the Development Bank shall examine and decide on the sale of debts for debt recovery when all of the following conditions are met:

a) The debt falls under one of the cases stipulated in Clause 1, Article 8 of this Decision or is currently being monitored off-balance sheet or has been removed from the off-balance sheet;

b) There is no written agreement between the Development Bank and the customer prohibiting the sale of the debt;

c) The debt is not used as security for civil obligations at the time of selling the debt, except in cases where the guarantor agrees in writing to the sale of the debt;

d) The sale of debts valued lower than the remaining principal balance of the debt that has not yet been recovered can only be carried out for debts currently being monitored off-balance sheet or have been removed from the off-balance sheet, and such sales must comply with all conditions specified in Clause 5 of this Article.

2. Principles for implementing the sale of debts:

a) The Development Bank shall sell debts in accordance with the laws applicable to the activities of buying and selling debts by credit institutions and foreign bank branches, except for the contents stipulated in this Decision;

b) The sale of debts does not contravene the provisions of the loan contract/receivables contract and the loan guarantee contract signed between the Development Bank, the customer, and the guarantor;

c) The sale of debts is conducted through mutual agreement among the parties based on compliance with this Decision and relevant laws.

3. Method of selling debts: The Development Bank shall sell debts through public auction. The auction of debts shall be carried out in accordance with the laws on asset auctions.

4. Valuation of debts: The Development Bank must engage an appraisal organization established in accordance with the law to appraise the debt to determine the expected starting price for the debt to be auctioned.

5. In cases where debts being monitored off-balance sheet are valued lower than the remaining principal balance that has not yet been recovered, in addition to the conditions stipulated in Clause 1 of this Article, the Development Bank may only sell the debt if it meets all of the following conditions:

a) There are complete files and documents clearly identifying the subjective and objective reasons and the anticipated responsibility of related organizations and individuals in handling the loss of assets of the Development Bank when selling the debt below the remaining principal balance that has not yet been recovered;

b) There are files and documents proving that selling the debt is the optimal method for recovering the loan;

c) Being reviewed and agreed by the Development Bank's Supervisory Board with the proposal of the Development Bank's Board of Directors.

6. Prior to examining and deciding to sell debts being monitored off-balance sheet that are valued lower than the remaining principal balance that has not yet been recovered, the Board of Directors of the Development Bank shall be responsible for compiling the expected debts to be sold and submitting them to the Ministry of Finance for written opinions from the Ministry of Planning and Investment, the State Bank of Vietnam, and related agencies within a maximum period of 90 working days from the date of receipt of all required files and documents. The Development Bank's letter to the Ministry of Finance shall include the following main contents:

a) The current status of the borrowing customer and the expected debt to be sold: Name of the borrowing project/customer, borrowing period, date of transfer to off-balance sheet monitoring; the current status of debt recovery (principal and interest) of the loan, remaining debt balance not yet recovered at the time of submission for removal from the off-balance sheet; the impact of selling the debt on the Development Bank's finances; the current status of the borrowing customer's operations; the financial situation of the borrowing customer according to the latest audited financial report by an independent auditing company (except in cases where the customer has gone bankrupt, dissolved according to the law, or ceased operations as confirmed by the competent authority); the borrowing situation of the customer at other credit institutions (if any); credit relationship information of the customer provided by the National Credit Information Center (CIC) at the time of requesting to sell the debt;

b) The proposed plan to handle the loss of assets of the Development Bank when selling off-balance sheet monitored debts valued lower than the remaining principal balance that has not yet been recovered (in cases of asset loss due to subjective reasons, determining the specific anticipated responsibility of related organizations and individuals, compensation levels according to the law; insurance money if any);

c) Measures already used to recover loans after transferring to off-balance sheet monitoring and files and documents proving that selling the debt is the optimal method for recovering the loan;

d) The audit opinion of the Development Bank's Supervisory Board and the Board of Directors regarding the fulfillment of the conditions for selling the debt and other opinions (if any);

đ) Other files and documents (if any).

7. After completing the sale of debts, the Development Bank shall handle the loss of assets concerning the debt in accordance with Article 7 of this Decision.

Article 12. Archiving Records on Debt Sale

1. Records to be archived regarding debt sale

a) Customer request/agreement and guarantor's consent for debt sale documents (except in cases where the customer or guarantor is an organization declared bankrupt or dissolved, or an individual declared dead or missing under the law): Originals;

b) Credit agreement, loan guarantee contract, and debt acceptance contract (for loans requiring mandatory guarantees): Certified copies or true copies of originals;

c) Loan security contract/guarantee contract signed between the Development Bank and the guarantor (if applicable): Certified copies or true copies of originals;

d) Documents and materials related to the valuation of collateral assets and the amount of debt: Originals or certified copies or true copies of originals;

đ) Documentation and materials on selling debts valued lower than the remaining principal balance that have not been recovered, submitted for comments from the Ministry of Finance and relevant agencies as stipulated in Clause 6, Article 11 of this Decision: Originals or certified copies or true copies of originals;

e) The Development Bank’s Board of Directors' decision on selling debts valued lower than the remaining principal balance that have not been recovered after receiving written comments from the Ministry of Finance as stipulated in Clause 6, Article 11 of this Decision: Originals;

g) Debt sale contract in accordance with the law: Originals;

h) Other relevant documents and materials according to the internal regulations of the Development Bank.

2. Debt sale records must be retained by the Development Bank in accordance with the law. The Development Bank retains records permanently for debts sold at a price lower than the remaining principal balance that have not been recovered.

Article 13. Financial Treatment and Accounting for Debts Sold While Being Recorded Internally

1. Proceeds from debt sales shall be recovered according to the principle of recovering principal first, then interest and other financial obligations (if any).

2. In cases where the sale price of the debt is higher than or equal to the book value of the sold debt: After recovering the principal, interest, and other financial obligations (if any) of the sold debt, any positive difference remaining (if any) shall be accounted for by the Development Bank in accordance with its financial management regulations.

3. In cases where the sale price of the debt is lower than the book value of the sold debt: In addition to the proceeds from the sale of the debt, the Development Bank uses compensation money (in cases of subjective loss of property and required compensation under this Decision and relevant laws) and insurance money (if any) to recover the debt. The Development Bank writes off the unrecovered interest and other financial obligations (if any).

Article 14. Financial Treatment and Accounting for Debts Sold While Being Monitored Externally and Debts Already Written Off from External Monitoring

1. For debts being monitored externally, the Development Bank shall write off the sold debt from external monitoring.

2. Proceeds from the sale of debts being monitored externally and debts already written off from external monitoring shall be accounted for by the Development Bank in accordance with the law on its financial management regulations.

Section 3
INFORMATION REPORTING REGIME

Article 15. Information and Reporting System

1. Every six months and annually, the Development Bank shall report on the results of credit risk management in accordance with this Decision, specifically for each loan, each borrower, and the methods of handling, to be submitted to the Ministry of Finance, the Ministry of Planning and Investment, the State Bank of Vietnam, the Ministry of Public Security, the Ministry of Justice, the Government Inspectorate, and the National Audit Office. In case of emergencies, the Development Bank has the responsibility and obligation to provide information and reports to competent authorities upon request.

2. Based on the reports from the Development Bank, annually, the Ministry of Finance shall compile and report to the Prime Minister on the situation of credit risk management of the Development Bank after soliciting opinions from the Ministry of Planning and Investment, the State Bank of Vietnam, the Ministry of Public Security, the Ministry of Justice, the Government Inspectorate, and the National Audit Office.

3. Content of the Report:

a) The balance of loans subject to credit risk at the beginning and end of the period (specifically by each group of loans);

b) The balance of loans transferred to off-balance-sheet monitoring during the period; the balance of off-balance-sheet monitored loans at the beginning and end of the period; the balance of loans removed from off-balance-sheet monitoring during the period and cumulatively up to the reporting period; the amount recovered from loans transferred to off-balance-sheet monitoring during the period; the amount recovered from loans removed from off-balance-sheet monitoring during the period;

c) The balance of loans that have been handled through debt sales during the reporting period; the revenue from debt sales during the reporting period;

d) Report on loss handling in accordance with this Decision (if applicable);

đ) The establishment and use of provisions for credit risk management during the reporting period;

e) Detailed explanation on financial treatment of amounts recovered from loans that have been managed for credit risk.

4. Time for Data Closure:

a) For the mid-year report: From January 1st of the reporting year to June 30th of the reporting year;

b) For the annual report: From January 1st of the reporting year to December 31st of the reporting year.

5. Deadline for Submission of Reports:

a) Mid-year report: No later than July 30th of the reporting year;

b) For the annual report: No later than thirty days after the end of the fiscal year;

c) If the last day of the submission deadline falls on a public holiday or weekend, the submission deadline will be the next working day following that date.

6. Methods of Submitting Reports:

The Development Bank shall submit the reports stipulated in Clause 1 of this Article via one of the following methods:

a) Directly in paper form;

b) Through postal service in paper form;

c) Through specialized information reporting software system in electronic form (if available).

d) Other methods as prescribed by law.

Chapter III
IMPLEMENTATION

Article 16. Responsibilities of Relevant Agencies and Units

1. The Development Bank

a) Organize and implement credit risk management at the Development Bank in accordance with this Decision and relevant laws;

b) Issue internal regulations on credit risk management in accordance with this Decision and relevant laws, including detailed provisions on: files; forms; procedures and processes for handling credit risks; authority, responsibilities, and powers of each level and individual during the process of handling credit risks, and other related contents;

c) Review and evaluate files, and consider and decide on transferring loans to off-balance-sheet monitoring and selling debts in accordance with this Decision and relevant laws;

d) Bear full responsibility for the truthfulness, accuracy, and legality of the files, information, and data reported to the Ministry of Finance regarding the removal of loans from off-balance-sheet monitoring as stipulated in Article 9 of this Decision and the sale of off-balance-sheet monitored loans valued lower than the remaining principal balance of the loan not yet recovered as stipulated in Article 11 of this Decision;

đ) Implement internal audits, manage, and supervise the handling and recovery of loans in accordance with this Decision and relevant laws, limit the occurrence of bad debts; continue to monitor, urge, and take measures to fully recover loans that have been risk-managed;

e) Report and propose to the Ministry of Finance and relevant ministries and sectors to review and submit to the Prime Minister for amendments and supplements to this Decision (if necessary).

2. Ministry of Finance

a) Take the lead and coordinate with the Ministry of Planning and Investment, the State Bank of Vietnam, and related agencies to provide opinions on the Development Bank's proposals regarding the removal of loans from off-balance-sheet monitoring and the sale of loans valued lower than the remaining principal balance of the loan not yet recovered as stipulated in this Decision;

b) Take the lead and coordinate with related agencies to report to the Prime Minister on the annual situation of credit risk management of the Development Bank in accordance with this Decision;

c) Take the lead and coordinate with related agencies to handle issues arising from the implementation of this Decision and report to competent authorities for review and decision on amendments, supplements, or replacement of this Decision (if necessary).

3. The Ministry of Planning and Investment

Coordinate with the Ministry of Finance to handle issues arising from the implementation of this Decision, and report to competent authorities for review and decision on amendments, supplements, or replacement of this Decision (if necessary).

4. State Bank of Vietnam

a) Lead the inspection and audit of compliance with laws on currency and banking, including the content of credit risk management of the Development Bank as stipulated in this Decision and relevant laws;

b) Coordinate with the Ministry of Finance to handle issues arising from the implementation of this Decision, and report to competent authorities for review and decision on amendments, supplements, or replacement of this Decision (if necessary).

5. The Ministry of Justice

Coordinate with the Ministry of Finance to handle issues arising from the implementation of this Decision, and report to competent authorities for review and decision on amendments, supplements, or replacement of this Decision (if necessary).

6. Relevant ministries, sectors, and local government levels according to their functions and tasks shall direct subordinate agencies and enterprises within their jurisdiction to cooperate and support the Development Bank in debt recovery and risk management work in accordance with this Decision and relevant laws.

Article 17. Transitional Provisions

1. For debts that have been transferred to off-balance-sheet monitoring according to the Prime Minister's directive before this Decision takes effect: The Development Bank shall implement the relevant provisions on credit risk management after transferring such debts to off-balance-sheet monitoring as stipulated in this Decision. The files for transferring to off-balance-sheet monitoring and interest calculation for these debts shall be carried out according to the decision of the competent authority at the time of transferring to off-balance-sheet monitoring.

2. For investment credit debts, export credit debts, and guaranteed loan debts, where the Development Bank has sold such debts according to the Prime Minister's directive before this Decision takes effect: The Development Bank shall handle the financial matters related to the sold debt (principal, interest) and related contents in accordance with Article 7 and Clause 3 of Article 13 of this Decision.

Article 18. Effective Date

1. This Decision shall take effect from March 1, 2025.

2. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Councils of provinces and centrally-administered cities, Chairpersons of the Board of Directors and General Directors of the Development Bank are responsible for implementing this Decision.