The National Assembly has approved revisions to the 2024 Credit Institution Law, enhancing Vietnam’s banking sector by restoring banks’ authority to seize undisputed collateral—even in some criminal cases—and enabling the State Bank of Vietnam (SBV) to better support struggling financial institutions. This marks a key return of provisions from Resolution 42, which expired in 2023. Resolution 42 had previously boosted bad debt recovery rates and voluntary repayments. Its expiration led to reduced recoveries and heavier reliance on litigation. Analysts expect the revised law to improve asset quality and profitability, especially for retail-focused banks, by streamlining collateral liquidation. It also allows the SBV to issue 0% interest loans to distressed banks, ensuring quicker intervention. With improved legal clarity, banks can gain faster control over collateral from non-performing loans, recording earlier income from asset liquidation. Experts view this reform as vital for maintaining banking stability amid a recovering real estate market and economy. (ICE HO CHI MINH CITY)

Fonte notizia: Vietnam News