The State Bank of Vietnam (SBV) will not delay the deadline for implementing Circular No. 02/2013/TT-NHNN of June 1, 2013, on non-performing loans (NPLs), but certain requirements will be reconsidered to help commercial banks cope with the problem.
After deliberations, the implementation of the Circular, which regulates asset classification, level and method of setting aside risk provisions and use of these provisions to handle credit risks, was postponed to June 1, 2014, aiming to enable businesses to access loans and boost credit growth.
In an attempt to help banks prepare for the implementation of the new regulation, SBV has asked banks to calculate the increase in their NPLs if the new classifications take effect.
According to SBV Deputy Chief Inspector Dang Van Thao, SBV’s Banking Supervisory Agency proposed classifying NPLs into three groups: (i) businesses that have gone bankrupt or have been liquidated and have no capacity to recover their debts, (ii) businesses that are facing difficulties and require restructuring and more funding, debt rescheduling and reduced interest payments, and (iii) businesses that are already bankrupt or have been liquidated but still have some collaterals which may be sold to recover some of their debts.-