Circular No. 19/2013/TT-NHNN on the purchase, sale, and handling of non-performing loans of asset management companies of credit institutions in Vietnam

 CIRCULAR

REGULATIONS ON THE PURCHASE, SALE AND MANAGEMENT OF NON-PERFORMING LOANS BY ASSET MANAGEMENT COMPANIES

of credit institutions in Vietnam

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to Circular No. .../2014/TT-NHNN issued by the Governor of the State Bank of Vietnam stipulating the scope of foreign exchange activities, conditions, procedures, and formalities for approving foreign exchange activities of credit institutions and branches of foreign banks;

Pursuant to the Enterprise Law No. 60/2005/QH11 dated November 29, 2005;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to the Government Decree No. 53/2013/NĐ-CP dated May 18, 2013 on the establishment, organization and operation of Asset Management Companies of Credit Institutions in Vietnam;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam issues this Circular regulating the purchase, sale and management of non-performing loans by Asset Management Companies of Credit Institutions in Vietnam.

PART I
GENERAL PROVISIONS

This Circular regulates the purchase, sale and management of non-performing loans by Asset Management Companies of Credit Institutions in Vietnam (hereinafter referred to as Asset Management Companies); issuance, management and payment of special bonds.

Article 2. Applicability

1. Asset Management Company.

2. Credit Institution in Vietnam (hereinafter referred to as Credit Institution).

3. Borrower.

4. Guarantor.

Article 3. Explanation of Terms

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

1. Selling Credit Institution is a credit institution selling non-performing loans to the Asset Management Company.

2. Debt Restructuring is the implementation of adjustments to the repayment period; extension of debt; waiver, reduction of overdue interest penalties and fees; adjustment of the interest rate of non-performing debts.

3. Adjustment of debt repayment terms is the approval to change the principal and interest repayment period within the agreed repayment period in the credit contract, agency contract, corporate bond purchase contract, without changing the final repayment date.

4. Extension of Debt is the approval to extend the principal and interest repayment period beyond the agreed repayment period in the credit contract, agency contract, corporate bond purchase contract.

5. Authorized Credit Institution is a credit institution selling debt that has been authorized by the Asset Management Company to carry out one or more activities of the Asset Management Company.

6. Book Value of Principal Balance of a non-performing loan at a credit institution is the principal balance of the non-performing loan being recorded on the balance sheet of the credit institution; the book value of the principal balance of a non-performing loan at the Asset Management Company is the purchase price or the principal balance of the non-performing loan being recorded on the balance sheet of the Asset Management Company.

a) Activities permitted under Clause 1, Article 12 of the Government Decree No. 53/2013/NĐ-CP dated May 18, 2013 on the establishment, organization and operation of Asset Management Companies of Credit Institutions in Vietnam (hereinafter referred to as Decree No. 53/2013/NĐ-CP);

c) Transparency in the purchase, sale and management of non-performing loans;

d) Debt restructuring, financial support for borrowers.

2. Within five working days from the date of issuance, amendment, supplementation, abolition or replacement of the internal policies and regulations stipulated in Clause 1 of this Article, the Asset Management Company must publish on its electronic information website and send directly or through postal service to the State Bank of Vietnam (Supervisory Authority) for inspection, examination and supervision.

Chapter II
PURCHASE AND SALE OF NON-PERFORMING LOANS BETWEEN ASSET MANAGEMENT COMPANIES

AND CREDIT INSTITUTIONS

Section 1
GENERAL PROVISIONS

Article 5. Authority to Purchase and Sell Non-performing Debts

The authority to decide on purchasing and selling debts; the authority to sign and implement purchase and sale contracts of the Asset Management Corporation and credit institutions shall be carried out in accordance with the provisions of the law, the Charter, and internal regulations of the Asset Management Corporation and credit institutions.

Article 6. Transaction Currency

1. The currency used in the purchase and sale of debts between the Asset Management Corporation and credit institutions is the Vietnamese Dong (VND).

2. In cases where the Asset Management Corporation uses special bonds to purchase non-performing debts denominated in foreign currencies from credit institutions, the exchange rate of VND against foreign currencies for conversion into VND shall be applied as follows:

a) For non-performing debts denominated in US Dollars (USD), it is the average inter-bank exchange rate published by the State Bank of Vietnam at the time of signing the debt purchase and sale contract.

b) For non-performing debts denominated in foreign currencies other than USD, it is the import-export tax rate applicable to that foreign currency published by the State Bank of Vietnam at the time of signing the debt purchase and sale contract.

3. In cases where the Asset Management Corporation uses special bonds to purchase non-performing debts denominated in gold from credit institutions, the conversion price shall be the buying price of gold of the Joint Stock Company of Gold, Silver and Precious Stones Saigon at the time of signing the debt purchase and sale contract.

Article 7. Transfer of Rights and Benefits Related to Non-performing Debts

1. In the activity of purchasing and selling debts between the Asset Management Corporation and credit institutions, all rights and benefits attached to non-performing debts, collateral assets, and other security measures for non-performing debts shall remain unchanged and be transferred to the buyer according to the debt purchase and sale contract.

2. If the Asset Management Corporation and credit institutions agree to adjust the security conditions for non-performing debts, such agreement must be approved in writing by the borrower and the guarantor.

Article 8. Principles of Purchasing and Selling Non-performing Debts

1. Transparency and transparency.

2. Compliance with legal provisions and debt purchase and sale contracts.

3. Minimizing risks and costs in purchasing and selling non-performing debts.

4. The purchase and sale of non-performing debts shall be conducted on a per-debt basis or per-borrower basis when a borrower has multiple non-performing debts at one credit institution, or per-group of borrowers when a collateral asset secures multiple non-performing debts of different borrowers at one credit institution, or through other forms agreed upon by the parties in compliance with legal provisions.

Article 9. Credit Provisioning for Borrowers with Non-performing Debts Sold to the Asset Management Corporation

Borrowers with non-performing debts sold to the Asset Management Corporation and having effective production, business plans, or investment projects may be considered for credit provision by credit institutions and foreign bank branches in accordance with agreements and legal provisions.

1. The subject issuing special bonds is the Asset Management Corporation. The Asset Management Corporation authorizes the State Bank of Vietnam Trading Center to organize the issuance of special bonds in accordance with this Circular.

2. The Asset Management Corporation issues special bonds to purchase non-performing debts of credit institutions.

3. The issuance of bonds shall be conducted individually based on actual needs and the Special Bond Issuance Plan approved by the State Bank of Vietnam.

4. One special bond is issued corresponding to one purchased non-performing debt. In cases where the purchased non-performing debt is a syndicated loan, the Asset Management Corporation shall issue special bonds corresponding to each participating credit institution.

1. Face value of special bonds

a) The face value of special bonds shall be equal to the purchase price of non-performing loans as stipulated in Clause 1, Article 14 of Decree No. 53/2013/NĐ-CP and as stipulated in Clause 4, Article 10 of this Circular.

b) In cases where the purchased or sold non-performing loan is a syndicated credit facility, the face value of special bonds issued for each participating credit institution shall correspond to the book value of the outstanding principal of the non-performing loan after deducting the specific provisions not yet utilized for that non-performing loan being monitored at the participating credit institution.

2. Special bonds shall be issued in Vietnamese dong (VND).

3. Forms of special bonds

a) Special bonds may be issued in the form of journal entries or electronically identifiable data;

b) Special bonds may be issued in the form of registered certificates.

4. The Asset Management Corporation decides on the form of special bonds.

5. Special bonds must be deposited with the State Bank of Vietnam according to the State Bank's regulations on depositing securities and may be used in rediscount operations with the State Bank.

6. Credit institutions holding special bonds are exempt from deposit fees when depositing special bonds with the State Bank.

1. The issuance plan for special bonds is a collection of analyses, evaluations, and proposals regarding the issuance of special bonds by the Asset Management Corporation.

2. The issuance plan for special bonds includes the following contents:

a) Estimated volume, value, non-performing debt to be purchased, and credit institutions selling debts;

b) Estimated demand, issuance schedule for special bonds;

c) Proposals on the term structure of special bonds;

d) Evaluation of the Asset Management Corporation's capacity to purchase, manage, and resolve non-performing debts;

đ) Other contents as required by the State Bank.

1. The Asset Management Corporation prepares one set of documents requesting approval of the issuance plan for special bonds and sends it directly or through postal service to the State Bank (Bank Supervision Authority). The documents include:

a) A request for approval of the issuance plan for special bonds signed by the authorized representative of the Asset Management Corporation;

b) The resolution of the Board of Members of the Asset Management Corporation approving the issuance plan for special bonds along with the issuance plan for special bonds as stipulated in Article 12 of this Circular.

2. Before December 15 each year, the Asset Management Corporation prepares the documents as stipulated in Clause 1 of this Article to request the State Bank to approve the issuance plan for special bonds for the following year, except in cases stipulated in Clause 3 of this Article.

3. The time for preparing the documents requesting approval of the issuance plan for special bonds in 2013 by the Asset Management Corporation is decided by the Board of Members of the Asset Management Corporation.

4. Within fifteen working days from the date of receiving complete documents requesting approval of the issuance plan for special bonds as stipulated in Clause 1 of this Article, the State Bank examines and sends a document to the Asset Management Corporation regarding approval or disapproval of the issuance plan for special bonds. In case of disapproval, the document sent to the Asset Management Corporation must clearly state the reasons.

5. Based on the approved issuance plan for special bonds, the capacity of the Asset Management Corporation, and the requirements of credit institutions to resolve non-performing debts, the Asset Management Corporation decides to issue special bonds to purchase non-performing debts of credit institutions.

6. Based on monetary policy management objectives, requirements for restructuring credit institutions, and non-performing debt resolution targets during each period, the State Bank considers amending, supplementing, replacing, or revoking the approved issuance plan for special bonds when necessary.

1. Special bonds shall include the following minimum contents:

a) Name, address, establishment decision number, business registration number of the Asset Management Company;

b) Par value;

c) Term;

d) Issue date;

đ) Information on the purchase and sale debt contracts, non-performing debts purchased with special bonds;

e) Information on credit organizations holding special bonds: name of the credit organization, establishment license number or business registration certificate number, address of the credit organization.

g) In case special bonds are issued in the form of certificates, they must have issue symbols, serial numbers, signatures of the authorized representatives of the Asset Management Company, and other signatures as specified by the Asset Management Company and stamped by the Asset Management Company.

2. In addition to the contents prescribed in Clause 1 of this Article, the Asset Management Company may specify additional contents on special bonds that do not contravene the provisions of the law.

1. Responsibilities of the Asset Management Company

a) Organizing a system to manage and monitor issued special bonds;

b) Implementing rights and obligations related to special bonds;

c) Receiving and paying special bonds in accordance with the provisions of the law;

d) Reporting to the State Bank on the issuance and payment of special bonds.

2. Responsibilities of credit organizations holding special bonds

a) Implementing rights and obligations related to special bonds;

b) Transferring and paying special bonds to the Asset Management Company in accordance with the provisions of the law;

c) Determining the risk weight of special bonds at 20% when calculating the minimum capital adequacy ratio of credit organizations;

d) Only using special bonds to borrow rediscount funds from the State Bank, or to repurchase non-performing debts sold to the Asset Management Company as stipulated in this Circular.

Section 3
ASSET MANAGEMENT COMPANY BUYS BAD DEBTS

WITH SPECIAL BONDS

Article 16. Conditions for Non-Performing Debts Purchased by the Asset Management Company with Special Bonds

1. Non-performing debts purchased by the Asset Management Company with special bonds must meet all of the following conditions:

a) Scope of non-performing debts purchased:

(i) Non-performing debts in lending activities, including non-performing loans, discounting, financial leasing, factoring, and other non-performing debts as prescribed by the State Bank;

(ii) Unlisted corporate bonds purchased by credit organizations selling debts that are overdue for partial or full principal and interest payments for 90 days or more; or not yet overdue or overdue for less than 90 days but the issuing corporation has non-performing debts at that credit organization;

(iii) Entrusted purchases of unlisted corporate bonds, entrusted lending where the credit organization selling debts bears risks that are overdue for partial or full principal and interest payments for 90 days or more; or not yet overdue or overdue for less than 90 days but the issuing corporation, the entrustee, or the beneficiary of the entrustment has non-performing debts at that credit organization.

b) Non-performing debts must be secured by collateral;

c) Non-performing debts and collateral securing such debts must be lawful and have valid documentation, specifically:

(i) Loan agreements, trust agreements, bond purchase agreements, guarantee agreements must clearly reflect the creditor's rights of the credit organization, the debtor's responsibilities and obligations to repay the credit organization, and the guarantor's and obligor's responsibilities and obligations to repay the credit organization;

(ii) Non-performing debts not used to secure the obligations of the credit organization; collateral securing non-performing debts must not be in dispute at the time of debt purchase and sale.

d) Borrowers still exist;

đ) The book balance of the principal of non-performing debts or multiple non-performing debts of a borrower or a group of borrowers as stipulated in Clause 4, Article 8 of this Circular at the time of debt sale must not be lower than three billion VND for groups of borrowers and individual borrowers who are organizations; not lower than one billion VND for individual borrowers or another amount determined by the Governor of the State Bank.

3. The State Bank examines and submits to the Prime Minister for a decision on the Asset Management Company purchasing non-performing debts of credit organizations that do not fully meet the conditions prescribed in Clause 1 of this Article upon the Asset Management Company's proposal to ensure the safe operation of credit organizations and to quickly resolve non-performing debts.

1. Credit institutions shall review non-performing debts that meet the conditions stipulated in Clause 1, Article 16 of this Circular and prepare documents to request the purchase of debts from the Asset Management Corporation. The documents shall include:

a) A debt purchase application form according to the model of the Asset Management Corporation;

b) A list and information on non-performing debts as required by the Asset Management Corporation; an assessment of the current status of each non-performing debt, borrower proposed for sale to the Asset Management Corporation (overdue period, financial and operational status of the borrower, guarantor, collateral, recovery potential); proposal of the term of special bonds corresponding to each non-performing debt;

c) A commitment letter stating that the non-performing debt has not been used to secure the obligations of the credit institution selling the debt, and that the collateral for the non-performing debt is not disputed at the time of purchase and sale;

d) Copies of loan contracts, agency contracts, corporate bond purchase contracts, and asset guarantee contracts confirmed by the authorized representative of the credit institution selling the debt;

đ) Copies of files and documents related to non-performing debts, collateral, borrowers, guarantors, and obligors confirmed by the authorized representative of the credit institution selling the debt as required by the Asset Management Corporation;

2. The documents specified in points a, b, and c of Clause 1 of this Article must be signed by the authorized representative of the credit institution selling the debt. The documents specified in points d and đ of Clause 1 of this Article must be signed by the authorized representatives of all parties involved and notarized, certified, and registered in accordance with the law (if applicable);

3. In cases where the Asset Management Corporation does not authorize the credit institution selling the debt to perform certain activities as stipulated in Clause 2, Article 12 of Decree No. 53/2013/NĐ-CP, the credit institution selling the debt shall hand over the original documents specified in points d and đ of Clause 1 of this Article to the Asset Management Corporation;

4. The credit institution selling the debt shall be responsible for the completeness, accuracy, and truthfulness of the documents, materials, and texts related to the collateral, borrowers, guarantors, obligors, and non-performing debts sold to the Asset Management Corporation;

Article 18. Procedures and Formalities for Purchasing Non-performing Debts with Special Bonds

1. Within five working days from the date of receipt of the debt purchase request documents from the credit institution, the Asset Management Corporation must examine the documents and request the credit institution selling the debt to supplement the documents if necessary;

2. Within ten working days from the date of receipt of complete and valid documents as stipulated in Article 17 of this Circular, the Asset Management Corporation shall examine and assess the completeness and validity of the documents and issue a written response to the credit institution regarding the purchase or non-purchase of non-performing debts. If the debt is not purchased, the written response must clearly state the reasons;

3. Within five working days from the date of receipt of the written notification agreeing to purchase the debt from the Asset Management Corporation, the credit institution and the Asset Management Corporation shall proceed to sign the debt purchase and sale contract;

4. Within ten working days from the date of signing the debt purchase and sale contract, the credit institution selling the debt must notify the borrower, obligor, and guarantor about the debt sale content for their knowledge and performance of obligations towards the Asset Management Corporation;

5. After signing the debt purchase and sale contract, the Asset Management Corporation shall continue to verify, collect information, and evaluate the borrower, non-performing debt, and the accuracy and truthfulness of the documents and materials related to the non-performing debt and collateral.

Article 19. Right to Unilaterally Terminate the Purchase and Sale Contract of Bad Debts by Asset Management Corporation

1. The Asset Management Corporation has the right to unilaterally terminate the purchase and sale contract of bad debts in the following cases:

a) There is evidence that the purchased bad debt does not meet all the conditions stipulated in Clause 1 of Article 16 of this Circular, except for the case provided for in Clause 3 of Article 16 of this Circular;

b) The credit institution selling bad debts violates the provisions of Clause 2 of Article 21, points a and b of Clause 3 and Clause 4 of Article 31 of Decree No. 53/2013/NĐ-CP.

2. The unilateral termination of the purchase and sale contract of bad debts by the Asset Management Corporation shall be carried out in the following sequence:

a) The Asset Management Corporation sends a written notice to the credit institution selling bad debts, clearly stating the reasons for unilaterally terminating the contract;

b) Within five working days from the date of receipt of the Asset Management Corporation's written notice, the credit institution selling bad debts must repay the refinancing loan to the State Bank and be allowed by the State Bank (Trading Center) to lift the freeze on special bonds according to regulations. The credit institution selling bad debts returns the special bonds to the Asset Management Corporation and receives back the bad debts.

c) After receiving the bad debts from the Asset Management Corporation, the credit institution selling bad debts shall record and classify this bad debt into a risk group with a level of risk no lower than the risk group that the credit institution selling bad debts had classified at the time the bad debt was sold to the Asset Management Corporation.

3. The amount recovered from the bad debt during the period from the date the Asset Management Corporation purchases the bad debt to the date the Asset Management Corporation returns the bad debt to the credit institution selling bad debts shall be handled according to the provisions of Clause 2 of Article 43 of this Circular.

Article 20. Purchase and Sale Contract of Bad Debts with Special Bonds

1. The purchase and sale contract of bad debts shall be established in writing by the Asset Management Corporation, the credit institution, and related parties (if any). The purchase and sale contract shall include at least the following contents:

a) Name and address of the buyer of the debt, seller of the debt;

b) Name and address of the borrower, guarantor, and other related parties (if any) to the bad debt being purchased and sold;

c) Book value of the principal balance of the bad debt being purchased;

d) Purchase price, sale price of the debt, and payment method;

đ) Forms of guarantee, value of guaranteed assets of the bad debts determined by the credit institution or an independent valuation organization at the nearest point in time before the request to purchase the debt;

e) Effectiveness of the purchase and sale contract of bad debts;

g) Payment of special bonds, handling of recovered funds, and repurchase of bad debts previously sold to the Asset Management Corporation;

h) The Asset Management Corporation acts on behalf of the credit institution selling bad debts to use the recovered funds from the bad debt purchased with special bonds that the credit institution selling bad debts enjoys to repay the refinancing loan based on special bonds according to the provisions of point b of Clause 1 of Article 43 and Clause 3 of Article 44 of this Circular and the regulations of the State Bank regarding refinancing loans based on special bonds.

i) Rights and obligations of the parties, including the rights of the Asset Management Corporation to restructure the bad debt and unilaterally terminate the purchase and sale contract of bad debts; the obligation of the credit institution selling bad debts to accept the restructuring of the bad debt by the Asset Management Corporation and repurchase the bad debt when paying special bonds according to this Circular; the obligation of the credit institution selling bad debts to pay the Asset Management Corporation the amount specified in point a of Clause 2 of Article 43 of this Circular and other amounts as prescribed by law.

k) Method, completion time, and procedures for transferring the debt, collateral, and related documents, files concerning the bad debt, collateral, borrower, guarantor, debtor.

2. In the case where the bad debt being purchased and sold is a syndicated loan, the Asset Management Corporation works through the lead credit institution; the purchase and sale contract must be signed by the Asset Management Corporation and all participating credit institutions in the syndicated loan or the lead credit institution authorized in writing by the participating credit institutions to sign the purchase and sale contract with the Asset Management Corporation.

Article 21. Sale of Non-performing Loans at the Request of the State Bank

1. Credit organizations with a non-performing loan ratio of 3% or more of total credit outstanding must sell their loans to the Asset Management Corporation. In cases where credit organizations do not sell their loans to the Asset Management Corporation, the State Bank will consider and apply measures as prescribed in Clause 5, Article 14 of Decree No. 53/2013/NĐ-CP.

Based on the results of inspection, valuation, and independent audit, the State Bank requires credit organizations to sell their loans to the Asset Management Corporation to ensure that the non-performing loan ratio of the credit organization remains at a safe level and to implement measures as prescribed by law.

2. Within five working days from the date of receipt of the document from the Governor of the State Bank requesting the credit organization to sell its loans to the Asset Management Corporation, the credit organization shall submit to the Asset Management Corporation the application for purchasing the debt in accordance with Article 17 of this Circular.

3. The Asset Management Corporation and the credit organization selling the debt shall follow the procedures and formalities for purchasing and selling debts as prescribed in Article 18 of this Circular.

Article 22. Coordination and Exchange of Information Related to Non-performing Loans Purchased with Special Bonds

1. The Asset Management Corporation shall take the lead and coordinate with the credit organization selling the debt and the authorized credit organization to establish a database and information technology system to serve the management, handling of non-performing loans, payment of special bonds, and repurchase of non-performing loans.

2. The authorized credit organization shall be responsible for coordinating the handling and reporting in writing to the Asset Management Corporation the following contents:

a) Measures to recover non-performing loans;

b) Cases where borrowers request to convert debt into equity investment, financial provision, change in repayment conditions; restructuring of non-performing loans and requesting the Asset Management Corporation to provide guarantees;

c) Other contents as required by the Asset Management Corporation.

Section 4
ASSET MANAGEMENT COMPANY BUYS BAD DEBTS

AT MARKET VALUE

a) The non-performing loan meets the conditions stipulated in Clause 1, Article 16 of this Circular;

b) It is assessed by the Asset Management Corporation to have the ability to fully recover the purchase amount;

c) The collateral of the non-performing loan has the potential to be liquidated;

d) The borrower has prospects for recovering the ability to repay or has a feasible repayment plan.

2. When purchasing non-performing loans at market value, the Asset Management Corporation must appraise or hire an independent appraisal organization to determine the value of the non-performing loan.

1. A plan for purchasing debt at market value is a set of analyses, evaluations, and proposals regarding the purchase, sale, and handling of non-performing loans according to market principles.

a) Scope of non-performing loans purchased at market value (classified by borrower group, industry, sector, type of collateral);

b) Total expected non-performing loan balance to be purchased, sources of funds, and financial conditions of the Asset Management Corporation for purchasing debt at market value;

c) Analysis and evaluation of the effectiveness, risks, and capital recovery potential of purchasing debt at market value;

d) Measures for selling, handling debt, and collateral.

1. The Asset Management Corporation shall prepare one set of documents requesting approval of the Plan to Purchase Non-performing Loans at Market Value and submit it directly or via postal service to the State Bank of Vietnam (the Banking Supervision Authority). The documents shall include:

a) A request for approval of the Plan to Purchase Non-performing Loans at Market Value signed by the legitimate representative of the Asset Management Corporation;

b) The Resolution of the Board of Members of the Asset Management Corporation approving the Plan to Purchase Non-performing Loans at Market Value, along with the Plan to Purchase Non-performing Loans at Market Value as stipulated in Article 24 of this Circular.

2. Before December 15 each year, the Asset Management Corporation shall prepare the documents as prescribed in Clause 1 of this Article to request the State Bank of Vietnam to approve the Plan to Purchase Non-performing Loans at Market Value for the following year.

3. Within fifteen working days from the date of receipt of complete and valid documents as prescribed in Clause 1 of this Article, the State Bank of Vietnam shall examine and issue a document to the Asset Management Corporation regarding its approval or non-approval of the Plan to Purchase Non-performing Loans at Market Value of the Asset Management Corporation. In case of non-approval, the document sent to the Asset Management Corporation must clearly state the reasons.

4. Based on the specific conditions of the Asset Management Corporation, market conditions, and requirements for handling non-performing loans during each period, the State Bank of Vietnam may consider amending, supplementing, replacing, or revoking the approved Plan to Purchase Non-performing Loans at Market Value when necessary.

1. Based on the approved Plan to Purchase Non-performing Loans at Market Value by the State Bank of Vietnam, financial capacity, economic efficiency, and market conditions, the Asset Management Corporation shall decide and be responsible for purchasing non-performing loans at market value after completing the following tasks:

a) Assessing the non-performing loan that meets the conditions specified in Clause 1 of Article 23 of this Circular;

b) Determining the market value of the non-performing loan, including the collateral for the non-performing loan;

c) Evaluating the economic efficiency, risks, and capital recovery potential of purchasing the non-performing loan;

d) Analyzing and assessing the current status and prospects of the non-performing loan, borrower, guarantor, debtor, and conditions for purchasing the debt from the credit institution selling the debt;

đ) Anticipating feasible measures to handle the debt and collateral for the non-performing loan.

2. The purchase and sale of non-performing loans at market value between the Asset Management Corporation and the credit institution shall be carried out in accordance with the regulations of the State Bank of Vietnam on the purchase and sale of debts applicable to credit institutions.

Chapter III
NON-PERFORMING LOAN MANAGEMENT AND COLLATERAL ASSET MANAGEMENT

OF THE ASSET MANAGEMENT CORPORATION

Section 1
DEBT RESTRUCTURING AND CUSTOMER SUPPORT

1. The Asset Management Corporation shall consider and restructure purchased non-performing loans based on the borrower's request if they meet the conditions stipulated in this Circular.

2. The Asset Management Corporation shall consult with the selling credit institution before deciding to restructure the purchased non-performing loan in cases specified in Clause 4 of Article 28, Clause 2 of Article 29, and Clause 2 of Article 30 of this Circular.

3. The restructuring of purchased non-performing loans must comply with the provisions of Decree No. 53/2013/NĐ-CP and this Circular; the specific conditions of the loan, the borrower, the Asset Management Corporation, the selling credit institution; monetary market conditions; requirements for handling non-performing loans during each period; and agreements in the credit contract, agency contract, corporate bond purchase contract, and debt purchase and sale contract.

1. The Asset Management Corporation shall review and adjust the applicable interest rate on non-performing debts it has purchased to a reasonable level, commensurate with the borrower's repayment capacity, market interest rates during each period, and the agreements stipulated in the credit facility contract, promissory note, agency contract, corporate bond purchase contract, debt purchase and sale contract.

2. Quarterly, the Asset Management Corporation must publicly announce the reasonable interest rates as prescribed in Clause 1 of this Article.

3. The Asset Management Corporation shall consider and reduce the interest rate according to the provisions of Clause 1 of this Article when the non-performing debt and the borrower meet the following conditions:

a) The borrower cooperates well with the Asset Management Corporation and the authorized credit institution.

b) The borrower has a feasible repayment plan or a feasible financial restructuring and business operation plan.

c) The borrower is experiencing temporary financial difficulties and reducing the interest rate on the non-performing debt will help alleviate the borrower's financial difficulties and restore their production and business operations.

d) The non-performing debt does not violate the provisions of Article 126 of the Law on Credit Institutions at the time of signing the credit contract.

4. In cases where the Asset Management Corporation considers and adjusts the interest rate applied to non-performing debts purchased through special bonds as prescribed in Clause 1 of this Article, the Asset Management Corporation shall consult with the selling credit institution before making a decision. Within five working days from the date the Asset Management Corporation sends a request for comments on adjusting the interest rate on non-performing debts, the selling credit institution must respond in writing to the Asset Management Corporation.

5. Within five working days from the date of adjustment of the interest rate on non-performing debts, the Asset Management Corporation shall notify the borrower to be aware and implement, and simultaneously notify the selling credit institution (for non-performing debts purchased through special bonds).

1. The Asset Management Corporation shall consider reducing part or waiving all overdue interest penalties, fees, and loans that the borrower has not yet paid for non-performing debts it has purchased when the non-performing debt and the borrower meet the following conditions:

a) Meeting all conditions specified in Clause 3 of Article 28 of this Circular.

b) The borrower repays the debt immediately or commits to repay within a minimum of 60 days at least 5% of the outstanding principal balance of the borrower's unpaid debt at the time of considering the waiver or reduction of overdue interest penalties, fees, and loans.

2. In cases where the Asset Management Corporation considers waiving or reducing overdue interest penalties, fees, and loans arising after the signing of the contract for purchasing and selling non-performing debts acquired through special bonds, the Asset Management Corporation shall consult with the selling credit institution before making a decision. Within five working days from the date the Asset Management Corporation sends a request for comments, the selling credit institution must respond in writing regarding the issues raised by the Asset Management Corporation.

3. Within five working days from the date of waiving or reducing overdue interest penalties, fees, and loans, the Asset Management Corporation shall notify the borrower to be aware and implement, and simultaneously notify the selling credit institution (for non-performing debts acquired through special bonds).

1. The Asset Management Corporation shall examine and restructure debt repayment periods under the following forms of adjusting the repayment period for principal and/or interest, and extending the debt for non-performing debts purchased when borrowers meet the following conditions:

a) Borrowers have feasible debt repayment plans;

b) In cases where the repayment period for principal and/or interest is adjusted, borrowers are unable to repay the principal and/or interest within the agreed repayment period in credit contracts, entrustment contracts, corporate bond purchase contracts, and the Asset Management Corporation assesses that they have the ability to repay in subsequent periods after restructuring the repayment period;

c) In cases where the debt is extended, borrowers are unable to fully repay the principal and/or interest within the agreed repayment period in credit contracts, entrustment contracts, corporate bond purchase contracts, and are assessed by the Asset Management Corporation to be able to fully repay the debt within a certain period after the agreed repayment period;

d) For non-performing debts purchased with special bonds, the extension period for non-performing debts shall not exceed the remaining term of the corresponding special bond.

2. In cases where the Asset Management Corporation examines and restructures the repayment period for non-performing debts purchased with special bonds, the Asset Management Corporation shall consult with the selling credit institution before making a decision. Within five working days from the date the Asset Management Corporation sends a written request, the selling credit institution must respond in writing to the issues proposed by the Asset Management Corporation.

3. Within five working days from the date of restructuring the repayment period, the Asset Management Corporation shall notify the borrower to be aware and implement it, and simultaneously notify the selling credit institution (for non-performing debts purchased with special bonds).

Article 31. Financial Support Measures for Borrowers

1. The Asset Management Corporation shall consider applying one or more of the following financial support measures for borrowers:

a) Guaranteeing loans for borrowers from credit institutions;

b) Investing and providing finance through lending and purchasing corporate bonds;

c) Other investment and financing methods approved by the Governor of the State Bank.

The Asset Management Corporation shall use assets (excluding non-performing debts purchased with special bonds) and lawful capital to implement financial support measures as stipulated in Points b and c of Clause 1 of this Article.

2. The Asset Management Corporation shall consider investing and providing finance when borrowers meet the following conditions:

a) Borrowers have good recovery potential or have effective business operation plans or new investment projects;

b) There are appropriate measures to ensure the recovery of capital for investments and financial provision;

c) Investment and financial provision plans ensure safety and feasibility, including analysis and assessment of risk levels and economic efficiency of investments and financial provision, guarantees; sources of capital for implementation; ability to recover capital; measures to recover capital; measures to ensure capital safety and handle emerging risks;

d) Other conditions as prescribed by the Asset Management Corporation.

3. Borrowers shall be considered and guaranteed loans from credit institutions by the Asset Management Corporation if they meet the following conditions:

a) Borrowers have good recovery potential or have effective business operation plans or new investment projects;

b) Borrowers have legal collateral for loan guarantees;

c) Loan guarantee plans for borrowers to borrow from credit institutions ensure safety and feasibility, including analysis and assessment of risk levels and economic efficiency of investments and financial provision, guarantees; sources of capital for implementation; ability to recover capital; measures to recover capital; measures to ensure capital safety and handle emerging risks;

d) Other conditions as prescribed by the Asset Management Corporation.

4. Based on the conditions stipulated in Clauses 2 and 3 of this Article and the capital and financial capacity of the Asset Management Corporation, the Asset Management Corporation shall submit to the Governor of the State Bank for examination and approval before implementing investments, financial provision, and guarantees for borrowers.

1. The Asset Management Company shall prepare one set of documents to request approval of the Investment Scheme, financial provision scheme, and guarantee scheme for borrowers borrowing from credit institutions (hereinafter collectively referred to as the Financial Support Scheme for Borrowers) and submit them directly or via postal service to the State Bank of Vietnam (the Banking Supervision Authority). The documents shall include:

a) A request for approval of the Financial Support Scheme for Borrowers and contribution of capital, purchase of shares of borrowers signed by the authorized representative of the Asset Management Company;

b) The resolution of the Board of Members of the Asset Management Company approving the Financial Support Scheme for Borrowers, accompanied by the Financial Support Scheme for Borrowers as stipulated in point c, Clause 2, point c, Clause 3, Article 31 of this Circular.

2. Within fifteen working days from the date of receipt of the request for approval of the Financial Support Scheme for Borrowers as prescribed in Clause 1 of this Article, the State Bank of Vietnam shall examine and issue a document to the Asset Management Company regarding approval or non-approval. In case of non-approval, the document sent to the Asset Management Company must clearly state the reasons.

Article 33. Certain Safety Limits and Risk Control Measures in the Operations of the Asset Management Company

1. The total investment, financial provision, and guarantee amount of the Asset Management Company for one borrower shall not exceed fifty percent of the charter capital of the Asset Management Company.

2. The total value of contributed charter capital and share capital at point b, Clause 1, Article 36 of this Circular shall not exceed the charter capital of the Asset Management Company.

3. Borrowers undergoing dissolution, bankruptcy, or revocation of business license shall not be considered for interest rate adjustment, exemption, reduction of late payment penalties and fees, overdue interest, restructuring of repayment terms, or financial support by the Asset Management Company.

Section 2
NON-PERFORMING LOAN MANAGEMENT AND COLLATERAL ASSET MANAGEMENT

1. The Asset Management Company shall sell the purchased non-performing debts from credit institutions to organizations and individuals at market value to recover capital.

2. The Asset Management Company shall sell non-performing debts according to the following principles:

a) Ensuring transparency and fairness;

b) Ensuring agreement and voluntariness;

c) Selling non-performing debts through auction or competitive bidding with participation of at least three unrelated buyers as defined by law. In cases where it is impossible to sell non-performing debts through auction or competitive bidding, the Asset Management Company shall sell the non-performing debts based on direct negotiation with the buyer;

d) The selling price of the debt shall be the most reasonable price based on comparison with the bid prices for the non-performing debt or reference to the price of similar quality non-performing debt or the value of the non-performing debt determined by the Asset Management Company or an independent valuation organization to minimize losses in handling non-performing debt.

3. The sale of debt must be documented in a contract.

4. The Asset Management Company may authorize credit institutions to sell non-performing debts according to requirements and conditions specified by the Asset Management Company.

2. Within five working days from the date of signing the debt sale contract, the Asset Management Corporation must send one copy of the debt sale contract to the selling credit institution and notify the selling credit institution of the amount it will receive.

3. In cases where special bonds have not yet matured, the Asset Management Corporation may resell the non-performing debts purchased with special bonds back to the credit institution that sold those non-performing debts to the Asset Management Corporation, based on the principle of mutual agreement on the terms and prices of buying and selling debts.

Article 36. Capital Contribution of Borrower Enterprises

1. The Asset Management Corporation may use purchased non-performing debts and lawful assets and capital to implement:

a) Converting non-performing debts purchased with special bonds into registered capital or share capital of borrower enterprises in accordance with the law;

b) Using lawful assets (excluding non-performing debts purchased with special bonds) and lawful capital to contribute to the registered capital or share capital of borrower enterprises in accordance with the law after obtaining approval from the State Bank.

2. The Asset Management Corporation contributes capital to participate in restructuring borrower enterprises.

3. The Asset Management Corporation must develop a Plan for Contributing Registered Capital or Share Capital to Borrower Enterprises, which includes analyzing and evaluating the effectiveness of contributing registered capital or share capital, the financial situation and operations of borrower enterprises, sources of capital for contribution, the ability to recover contributed capital, and proposals for measures to recover contributed capital and participate in restructuring borrower enterprises.

4. The Asset Management Corporation contributes registered capital or share capital to borrower enterprises when meeting the following conditions:

a) The plan for contributing registered capital or share capital to borrower enterprises is feasible; in cases of contributing registered capital or share capital as stipulated in point b, Clause 1 of this Article, the plan for contributing registered capital or share capital must be approved by the State Bank;

b) The Asset Management Corporation has the right to participate in the process of restructuring borrower enterprises;

c) The contribution of registered capital or share capital does not violate the limit on the contribution of registered capital or share capital of the Asset Management Corporation as stipulated in Clause 2, Article 33 of this Circular;

d) The borrower enterprise has prospects for financial and operational recovery after the Asset Management Corporation participates in contributing registered capital or share capital;

e) The borrower enterprise is not undergoing bankruptcy, dissolution, or revocation of its operating license.

5. In cases where non-performing debts purchased with special bonds are converted into registered capital or share capital of borrower enterprises, the Asset Management Corporation and the selling credit institution shall carry out the following:

a) Before implementation, the Asset Management Corporation shall agree with the selling credit institution on converting non-performing debts purchased with special bonds into registered capital or share capital of borrower enterprises;

b) Within five working days from the date of fully converting the non-performing debts into registered capital or share capital of borrower enterprises, the Asset Management Corporation shall resell the contributed registered capital or share capital to the selling credit institution at the value of the contributed registered capital or share capital and settle the special bonds.

6. Any proceeds from debt recovery arising during the period from when the Asset Management Corporation purchases non-performing debts until they are converted into registered capital or share capital shall be handled in accordance with Clause 2, Article 43 of this Circular.

1. The Asset Management Company shall prepare one set of documents to request approval of the capital contribution scheme of borrower customers as stipulated in point a, Clause 4, Article 36, and submit them directly or via postal service to the State Bank of Vietnam (the Banking Supervisory Authority). The documents include:

a) A request for approval of the capital contribution scheme of borrower customers signed by the authorized representative of the Asset Management Company;

b) The resolution of the Board of Members of the Asset Management Company approving the capital contribution scheme of borrower customers, along with the capital contribution scheme of borrower customers as prescribed in Clause 3, Article 36 of this Circular.

2. Within fifteen working days from the date of receiving complete and valid documents as stipulated in Clause 1 of this Article, the State Bank of Vietnam shall examine and issue a document to the Asset Management Company regarding the approval or non-approval of the capital contribution scheme of borrower customers. In case of non-approval, the document sent to the Asset Management Company must clearly state the reasons.

Article 38. Handling and Selling Secured Assets of Purchased Non-performing Loans

1. The Asset Management Company shall cooperate with relevant agencies and organizations to complete all necessary procedures and legal documents concerning secured assets of purchased non-performing loans.

2. The Asset Management Company shall handle secured assets of purchased non-performing loans according to the provisions of Article 18 of Decree No. 53/2013/ND-CP and other related legal regulations.

a) The sale price of secured assets in cases of sale through negotiation with buyers or the starting price of secured assets in cases of sale through auction;

b) The value of secured assets in cases where the Asset Management Company accepts secured assets in lieu of the fulfillment of the guarantor's obligations.

4. In cases where the Asset Management Company accepts secured assets in lieu of the fulfillment of the guarantor's obligations, the Asset Management Company must independently appraise or hire an independent appraisal organization to determine the market value of secured assets as the basis for offsetting the borrower customer's debt obligation.

Section 3
THE ASSET MANAGEMENT COMPANY SHALL AUTHORIZE AND MONITOR THE IMPLEMENTATION OF AUTHORIZED ACTIVITIES

Article 39. Content and Method of Authorization

1. The Asset Management Company shall review and authorize credit institutions selling debts to carry out one or more activities as stipulated in Clause 2, Article 12 of Decree No. 53/2013/ND-CP.

2. The authorization as stipulated in Clause 1 of this Article must be established in a power of attorney contract. The power of attorney contract shall include at least the following contents:

a) Name and address of the authorizing party and the authorized party;

b) Scope and content of the authorization;

c) Duration of the authorization;

d) Rights and obligations of the parties.

3. The Asset Management Company shall select either partial or full authorization of the activities stipulated in Clause 1 of this Article to credit institutions selling debts in accordance with this Circular and other related legal regulations.

4. Within ten working days from the date of signing the power of attorney contract, the authorized credit institution shall notify the borrower customer, the debtor, the guarantor, and other related parties about the content and activities authorized by the Asset Management Company to the credit institution selling debts for their knowledge and implementation.

Article 40. Inspection and supervision of activities carried out under authorization

1. The Asset Management Corporation shall establish a database, information technology system, and reporting content and requirements for exchanging information with authorized credit institutions to monitor the implementation of authorized activities by such credit institutions as prescribed in Clause 1, Article 39 of this Circular.

2. The Asset Management Corporation shall regularly inspect and supervise the authorized credit institutions in their performance of activities authorized by the Asset Management Corporation as stipulated in the authorization contract.

Article 41. Rights and responsibilities of the Asset Management Corporation and authorized credit institutions

1. Rights and responsibilities of the Asset Management Corporation:

a) Requesting authorized credit institutions to report and provide information and documents related to authorized activities;

b) Requesting authorized credit institutions to perform authorized activities according to the agreement in the authorization contract and the provisions of the law;

c) Requesting authorized credit institutions to remedy, repair, and compensate for losses caused by breaches of the authorization contract and legal provisions during the implementation of authorized activities; terminate the authorization contract and initiate legal proceedings against the authorized credit institution that violates the authorization contract in accordance with the law;

d) Promptly reporting to the State Bank (Bank Supervisory Authority) in cases where violations of the law by authorized credit institutions are discovered;

đ) For non-performing loans purchased at market value, the Asset Management Corporation must negotiate with the authorized credit institution regarding the costs of authorization and matters related to the costs of authorization in the authorization contract;

e) Other rights and responsibilities as stipulated in the authorization contract and the law.

2. Rights and responsibilities of authorized credit institutions:

a) Providing truthful, complete, and timely reports and information as required by the Asset Management Corporation; being responsible for the accuracy of the information, documents, and reports provided to the Asset Management Corporation;

b) Cooperating and being subject to inspection and supervision by the Asset Management Corporation during the implementation of authorized activities;

c) Implementing recommendations and requests from the Asset Management Corporation to ensure asset safety, rectify errors, and compensate for losses to the Asset Management Corporation due to breaches of the authorization contract and legal provisions during the implementation of authorized activities;

d) Immediately notifying the Asset Management Corporation of any recovered debt amounts;

đ) For non-performing loans purchased at market value, the authorized credit institution may be reimbursed by the Asset Management Corporation for the costs of performing authorized activities as stipulated in the authorization contract;

e) Rights and responsibilities as stipulated in the authorization contract, Clause 4, Article 31 of Decree No. 53/2013/NĐ-CP, and other relevant legal provisions.

All proceeds obtained in cash and assets from debt recovery, disposal, sale of debts, and collateral assets, after deducting related costs for selling debts and collateral assets, and expenses for asset preservation, repair, and upgrade shall be repaid by the Asset Management Corporation in the following priority order:

1. Principal balance;

2. Interest within the payment period;

3. Overdue interest;

4. Penalty interest (if applicable);

5. Refund to borrowers, guarantors, and debtors any excess amount (if any).

1. The proceeds from debt recovery in cash of bad debts purchased with special bonds that credit institutions are entitled to according to point b, Clause 2 of this Article shall be handled as follows:

b) If the credit institution sells debts and borrows refinancing capital based on special bonds, within five working days at the beginning of the next quarter, the Asset Management Corporation uses the proceeds from debt recovery in cash that the credit institution is entitled to in the quarter to repay the refinancing capital borrowed based on the special bonds and deducts this amount from the total proceeds from debt recovery that the credit institution is entitled to when repaying the special bonds.

2. The proceeds from debt recovery of bad debts purchased with special bonds shall be handled as follows:

a) The Asset Management Corporation is entitled to a certain percentage of the proceeds from debt recovery according to the regulations of the State Bank after reaching an agreement with the Ministry of Finance;

b) Credit institutions selling debts are entitled to the remaining proceeds from debt recovery after deducting the amount that the Asset Management Corporation is entitled to according to point a, Clause 2 of this Article.

1. Special bonds are due for repayment in the following cases:

a) The risk reserve amount established for special bonds is not lower than the book value of the principal balance of the bad debt being monitored on the Asset Management Corporation's books, including the following situations:

(i) The Asset Management Corporation sells the bad debt to organizations or individuals, including the case where it resells the bad debt purchased with special bonds to the credit institution selling the debt at market value or agreed price;

(ii) The Asset Management Corporation converts the entire bad debt purchased into charter capital or shares of the borrower who is a business.

b) Special bonds are due for repayment.

a) In the case where the full book value of the principal balance of the bad debt has not been recovered, the credit institution selling debts buys back the bad debt from the Asset Management Corporation at the book value of the principal balance being monitored on the Asset Management Corporation's books, the contribution capital or shares at the borrower for the case where part of the bad debt is converted into charter capital or shares of the borrower (if any); returns the relevant special bonds to the Asset Management Corporation and receives the proceeds from debt recovery entitled to according to point b, Clause 2 of Article 43 of this Circular (if any);

b) In the case where the full book value of the principal balance of the bad debt has been fully recovered (including the case where the entire bad debt has been sold to organizations or individuals), the credit institution selling debts buys back the contribution capital or shares at the borrower for the case where part of the bad debt is converted into charter capital or shares of the borrower (if any); returns the special bonds to the Asset Management Corporation and receives the proceeds from debt recovery entitled to according to point b, Clause 2 of Article 43 of this Circular;

c) In the case where the entire bad debt is converted into charter capital or shares of the borrower who is a business, the credit institution selling debts returns the special bonds to the Asset Management Corporation and buys back the contribution capital or shares at the borrower, while paying the Asset Management Corporation the proceeds from debt recovery entitled to according to point a, Clause 2 of Article 43 of this Circular.

3. Within five working days from the date when special bonds become due for repayment as stipulated in Clause 1 of this Article, if the credit institution selling debts does not fully repay the refinancing capital borrowed based on those special bonds to the State Bank, the Asset Management Corporation will not pay the proceeds from debt recovery (if any) and the remaining bad debt (if any) to the credit institution selling debts; the Asset Management Corporation will use the proceeds from debt recovery in cash from the bad debt purchased with special bonds that the credit institution selling debts is entitled to according to point b, Clause 2 of Article 43 of this Circular to repay the refinancing capital of the credit institution selling debts at the State Bank and reclaim the special bonds when the refinancing capital borrowed based on those special bonds has been fully repaid to the State Bank.

Article 45. Purchase of Non-Performing Loans Upon Special Bond Payment

1. When purchasing non-performing loans as prescribed in Point a, Clause 2, Article 44 of this Circular, the selling credit institution shall be responsible for fully settling to the Asset Management Corporation all amounts that the Asset Management Corporation is entitled to receive as stipulated in Point a, Clause 2, Article 43 of this Circular, and the Asset Management Corporation must provide the selling credit institution with information and documents on the principal balance, interest, penalties, and fees that have become due but have not been paid by the borrower, as well as other relevant information and documents concerning the loan, the borrower, guarantor, and obligor.

2. The selling credit institution purchasing non-performing loans from the Asset Management Corporation does not require the consent of the borrower, obligor, or guarantor.

Chapter V
ESTABLISHMENT AND USE OF RISK RESERVE

1. Within the term of special bonds, credit institutions selling debts must establish provisions for risk related to special bonds as part of operating expenses.

The term of special bonds is measured in years.

3. Credit institutions selling debts are not required to establish general provisions for special bonds.

4. The amount of risk provisions established by credit institutions selling debts for special bonds shall be used as follows:

a) To cover the shortfall between the amount recovered from debt collection and the face value of special bonds in cases where all non-performing loans have been sold to organizations or individuals (excluding cases specified in point a, Clause 2, Article 44 of this Circular), and all non-performing loans have been used as paid-in capital or share capital of borrowing customers;

b) To handle risks associated with non-performing loans repurchased according to the provisions of point a, Clause 2, Article 44 of this Circular in cases where the book value of the principal of non-performing loans has not been fully recovered.

6. After being addressed through risk provisions, non-performing loans shall be recorded off-balance sheet by credit institutions selling debts, continue to be monitored, and measures taken to recover debts in accordance with laws and agreements with borrowing customers.

7. The process of removing non-performing loans that have been addressed according to Clause 6 of this Article from off-balance sheet shall be carried out in accordance with the State Bank's regulations on asset classification, provisioning levels, methods of establishing risk provisions, and the use of provisions to address risks in the operations of credit institutions and foreign bank branches.

1. Asset Management Corporation shall implement the classification, establishment, and use of risk provisions to address the amount paid to purchase non-performing loans according to the State Bank's regulations on asset classification, provisioning levels, methods of establishing risk provisions, and the use of provisions to address credit risks in the operations of credit institutions and foreign bank branches.

2. Asset Management Corporation shall classify the amount paid to purchase non-performing loans into a group with a risk level no lower than the group to which the non-performing loan was classified by the credit institution selling debts at the time of purchase.

Chapter VI
RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS INVOLVED

Article 48. Responsibilities of units under the State Bank

1. The Banking Inspection and Supervision Authority:

a) Take the lead and coordinate with relevant units to develop and submit to the Governor of the State Bank for approval by the Prime Minister to purchase non-performing loans of credit institutions as stipulated in Clause 3, Article 16 of this Circular;

(i) Within two working days from the date of receiving complete and valid documents from the Asset Management Corporation requesting approval of the Plan for Issuing Special Bonds, the Plan for Purchasing Non-performing Loans at Market Value, the Financial Support Plan for Borrowing Customers, and the Plan for Contributing Paid-in Capital or Share Capital of Borrowing Customers, the Banking Inspection and Supervision Department shall issue a document soliciting opinions from relevant units of the State Bank.

(ii) Within three working days from the date of receiving the document requesting opinions from the Banking Inspection and Supervision Department, the units solicited for opinions must provide their opinions in writing to the Banking Inspection and Supervision Department for consolidation and submission to the Governor of the State Bank for consideration and approval or rejection of the Plan for Issuing Special Bonds, the Plan for Purchasing Non-performing Loans at Market Value, the Financial Support Plan for Borrowing Customers, and the Plan for Contributing Paid-in Capital or Share Capital of Borrowing Customers.

d) Monitor, inspect, audit, and handle violations by credit institutions and the Asset Management Corporation in complying with laws on purchasing, selling, and handling non-performing loans;

đ) Take the lead and coordinate with relevant units and the Asset Management Corporation to advise and assist the Governor of the State Bank in drafting reports on the activities of the Asset Management Corporation;

e) Take the lead and coordinate with relevant units to advise and assist the Governor of the State Bank in guiding and organizing the implementation of this Circular.

a) Guide and organize the issuance of special bonds according to the authorization of the Asset Management Corporation as stipulated in this Circular;

b) Guide and organize the implementation of custody services for special bonds of the Asset Management Corporation;

c) Implement the freezing of special bonds related to refinancing loans when credit institutions owning special bonds borrow refinancing funds; lift the freeze on special bonds in cases where the refinancing loans of credit institutions are fully repaid.

3. The Financial and Accounting Department shall take the lead and coordinate with the Banking Supervisory Agency and related units to develop and submit to the Governor of the State Bank for issuance regulations on accounting entries for the purchase, sale, and handling of non-performing loans and other transactions related to the purchase, sale, and handling of non-performing loans by Asset Management Companies and credit institutions.

4. The Monetary Forecasting and Statistics Department shall take the lead and coordinate with the Banking Information Technology Department and related units to develop and submit to the Governor of the State Bank for issuance regulations on reporting and statistical systems and the transparency of Asset Management Company activities; collect, compile, and statistically analyze data on the purchase, sale, and handling of non-performing loans.

5. The Banking Information Technology Department shall support State Bank branches, Asset Management Companies, and credit institutions in coordinating, exchanging, providing, and utilizing information and statistical data on the purchase, sale, and handling of non-performing loans.

6. The Credit Information Center shall provide information related to non-performing debts and borrowers at the request of the Asset Management Company for the purpose of handling non-performing loans.

7. The State Bank provincial and municipal branches shall supervise, inspect, audit, and handle violations by credit institutions, organizations, and individuals within their jurisdiction in complying with laws and regulations on the purchase, sale, and handling of non-performing loans.

8. Related units:

a) Coordinate with the Banking Supervisory Agency to advise and assist the Governor of the State Bank in implementing this Circular;

b) Coordinate with the Banking Supervisory Agency to review and submit to the Governor of the State Bank for decision the contents stipulated in Clauses 4 and 6, Article 13; Point d, Clause 1 and Clause 3, Article 16; Clauses 3 and 4, Article 25; Clause 2, Article 32; Clause 2, Article 37 of this Circular;

c) Coordinate with the Banking Supervisory Agency to advise and assist the Governor of the State Bank in preparing reports on the activities of the Asset Management Company;

d) Shall create favorable conditions for the operations of the Asset Management Company according to its assigned functions and tasks and directives from the Governor of the State Bank.

1. Timely and properly implement the purchase, sale, and handling of non-performing loans; guide credit institutions to establish and submit lists of eligible non-performing loans for sale to the Asset Management Company as prescribed in Clause 1, Article 16 of this Circular.

2. Report to the State Bank on the purchase, sale, handling, and recovery of purchased non-performing loans; issue, use, and settle special bonds and other activities as prescribed by the State Bank.

3. Use recovered funds from non-performing loans sold by credit institutions to repay loans obtained through special bonds issued by the selling credit institution at the State Bank.

5. Take the lead and coordinate with credit institutions and related units to implement measures to handle non-performing loans and collateral secured by special bonds to repay loans obtained through special bonds to the State Bank.

6. Fulfill responsibilities as prescribed in this Circular and other responsibilities as prescribed by law.

1. Conduct evaluations to identify non-performing loans that meet the conditions for proactive sale to the Asset Management Corporation and bear responsibility for the results of such evaluations.

2. Report to the State Bank of Vietnam on the purchase, sale, and handling of non-performing loans in accordance with the regulations of the State Bank of Vietnam.

3. Credit institutions selling debts shall fulfill the responsibilities stipulated in Clause 3, Article 31 of Decree No. 53/2013/NĐ-CP.

a) Fulfilling all obligations prescribed in Clause 2, Article 21 of Decree No. 53/2013/NĐ-CP;

c) Paying to the Asset Management Corporation the amount specified in Point a, Clause 2, Article 43 of this Circular and other amounts as prescribed by law;

d) Fulfilling the responsibilities stipulated in Clause 4, Article 31 of Decree No. 53/2013/NĐ-CP.

5. Closely cooperate with the Asset Management Corporation in the purchase, sale, and handling of non-performing loans; provide full, accurate, and timely information as requested by the Asset Management Corporation.

Article 51. Responsibilities of Borrowers and Debtors

1. Fulfill the responsibilities prescribed in Article 32 of Decree No. 53/2013/NĐ-CP.

2. Fulfill the responsibilities as prescribed in this Circular and other responsibilities as prescribed by law.

Article 52. Responsibilities of Guarantors

1. Fulfill the responsibilities prescribed in Article 33 of Decree No. 53/2013/NĐ-CP.

2. Fulfill the responsibilities as prescribed in this Circular and other responsibilities as prescribed by law.

Chapter VII
IMPLEMENTATION

Article 53. Effective Date

This Circular takes effect from September 15, 2013.

Article 54. Implementation Organization

The Office, Head of Banking Inspection and Supervision, Heads of Units under the State Bank of Vietnam, Governors of Provincial and Municipal Branches of the State Bank of Vietnam, Chairmen of the Board of Directors, Chairmen of the Board of Members, and General Directors (Directors) of Vietnamese credit institutions; Chairmen of the Board of Members and General Directors of the Asset Management Corporation and related organizations and individuals are responsible for implementing this Circular./.