Decree No. 18/2016/ND-CP amending and supplementing certain articles of Decree No. 53/2013/ND-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of the Asset Management Company of Vietnam's Credit Institutions.

DECREE

Amending and supplementing some articles of Decree No. 53/2013/NĐ-CP

dated May 18, 2013 of the Government on the establishment, organization and

operation of the Vietnam Asset Management Company

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

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

Pursuant to the Law on Credit Institutions dated June 16, 2010;

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

The Government promulgates this Decree amending and supplementing some articles of Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization and operation of the Vietnam Asset Management Company.

Article 1. Amending and supplementing some articles of Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization and operation of the Vietnam Asset Management Company as follows:

1. Amending and supplementing Points i and l of Clause 1, Article 13 as follows:

“i) For non-performing loans purchased with special bonds, the Asset Management Company is entitled to collect a certain amount of money from the recovery of non-performing loans according to the ratio prescribed by the State Bank after consultation with the Ministry of Finance, minus the amount collected by the Asset Management Company under Point l of this Clause, in cases where the amount recovered from the non-performing loan is greater than the amount collected under Point l of this Clause.

In cases where this amount is less than the amount collected by the Asset Management Company under Point l of this Clause, the Asset Management Company shall not be required to refund financial institutions the amount collected under Point l of this Clause;”

“l) For non-performing loans purchased with special bonds, annually, the Asset Management Company is entitled to collect a certain amount of money according to a ratio prescribed by the State Bank after consultation with the Ministry of Finance calculated based on the remaining principal balance at the end of the period of the non-performing loan being recorded on the balance sheet of the Asset Management Company.

The amount paid by financial institutions to the Asset Management Company according to the provisions of Points i and l of this Clause shall be recorded as operating expenses of financial institutions.”

2. Amending and supplementing Clause 2, Article 14 as follows:

“2. The Asset Management Company purchases non-performing loans from financial institutions at market value based on agreement and re-evaluated value of the non-performing loans.

Financial institutions may gradually allocate the difference between the book value minus the purchase price of the non-performing loan purchased at market value and the risk reserve already allocated for the purchased non-performing loan according to the following principles:

a) The allocation target is financial institutions that incur losses or when immediately allocating this difference will lead to losses;

b) The allocation shall be carried out within a maximum period of five years from the date of sale of the debt. The annual allocation amount shall not be lower than the revenue and expenditure difference (excluding the allocated amount).

The Ministry of Finance shall provide detailed guidance on this allocation.”.

3. Supplementing Article 20a after Article 20 as follows:

“Article 20a. Extension of Special Bonds

1. After obtaining approval from the State Bank, the Asset Management Company extends the term of special bonds issued to purchase non-performing loans from financial institutions implementing restructuring plans or facing financial difficulties. The total extension period and original term of the special bonds shall not exceed ten years from the issuance date.

2. The State Bank shall specify the details regarding the extension of special bonds as stipulated in Clause 1 of this Article.”

Article 2. Effective Date

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

2. Abolishing Clause 3, Article 1 and the segment “l) Entitled to collect a certain amount of money according to a ratio prescribed by the State Bank after consultation with the Ministry of Finance calculated based on the remaining balance at the end of the period of the non-performing loan purchased with special bonds. The amount paid by financial institutions to the Asset Management Company according to this provision shall be recorded as operating expenses of financial institutions” in Clause 4, Article 1 of Decree No. 34/2015/NĐ-CP dated March 31, 2015 of the Government amending and supplementing some articles of Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization and operation of the Vietnam Asset Management Company.

Article 3. Responsibility for Implementation

The Minister, Head of a ministry equivalent to a ministry; Head of a government agency; Chairman of the People's Councils of provinces and centrally-administered cities; Chairman of the Board of Directors, General Director of the Asset Management Company; Chairman of the Board of Directors, Chairman of the Board of Directors and General Director (Director) of financial institutions and other related organizations and individuals are responsible for implementing this Decree./.