The expiration of Document No. 02 will bring huge debt repayment pressure to enterprises.

According to Donghai

Investing.com – At the meeting on system improvement, monetary policy management, credit, foreign exchange, restructuring, bad debt disposal, inspection and supervision, Mr. Le Ngoc, General Manager of Investment and Commercial Joint Stock Bank and Vietnam Development (HM:) Lam Cheng Yuet Nga said that the banking industry Business activities face many difficulties.

The BIDV leader stated that the capital absorption capacity of economic sectors in 2024, although assessed positively, remains at a low level. Growth drivers such as exports, consumption, industrial production, and private investment are still slow.

At the same time, some companies are also facing difficulties in operating, especially legal issues, business environment, bond market and other issues. The financial capabilities of enterprises have declined, and there are still problems with the affordability of large enterprises.

Mr Lin said some businesses in the oil and renewable energy sectors faced legal risks, leading to an increase in banks’ risk of bad debts.

In addition, Document No. 02 will expire on June 30, 2024, which will put great pressure on corporate debt repayments. At the same time, credit institutions also face difficulties in dealing with bad debts.

Resolution 42 will also expire at the end of 2023. If replacement or extension is not carried out, it will slow down the process of bad debt processing and collection of banking institutions.

Meanwhile, the Treasury Department has no instructions or methodology for valuing debt. This can create difficulties and potential risks in dealing with bad debts, especially selling debt below its original debt price.

Debt settlement and litigation often take a long time, making debt settlement difficult and time-consuming and costly. What’s more, the authorities’ views and opinions also bring difficulties to credit institutions’ debt handling.

Regarding future solutions, BIDV leaders recommended that the government, the State Bank of Vietnam and local ministries and branches promote the removal of obstacles in the legal procedures of investment projects and work to support payments by credit institutions.

At the same time, it is necessary to support the development of capital markets, especially bond markets and stock markets, and ensure medium- and long-term funding channels for the economy, which will help reduce pressure on the banking system.

BIDV asks the government to propose to Congress an extension of the implementation time of Resolution 42, and also hopes that the government will instruct ministries and departments to support local project support credit institutions that allow project investors to change investors to deal with bad debts.

In addition, BIDV leaders recommended that the government, the Ministry of Finance and the State Bank of Vietnam consider and promulgate separate regulations on the bond issuance activities of credit institutions to adapt to their specific activities.

Finally, BIDV recommended that the National Bank consider extending the implementation of Circular 02 on debt structure, keeping debt categories unchanged until the end of December 2024, instead of the current end of June.

In addition, in order to give credit institutions a better basis for credit evaluation, BIDV requires the State Bank of Vietnam and the Ministry of Public Security to establish information portals, especially residential data application centers, in accordance with common standards.

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