Hanoi (VNA) - The State Bank of Vietnam (SBV) hasissued a document asking credit institutions and branches of foreign banks topush the resolving of non-performing loans in 2018.

Accordingly, each bad debt must be reviewed and evaluated toprovide a comprehensive picture about non-performing loans, mortgageassets and ability to reclaim debts, from which measures will be raised forresolving bad debts effectively.

Lenders have also been asked to cooperate with the Vietnam AssetManagement Company in handling bad debts and mortgaged assets sold to thiscompany.

In addition to this, the selling of bad debts at market pricesmust be promoted, the SBV said.

SBV Governor Le Minh Hung said 2018 would be a special year forthe banking sector to handle bad debts following the National Assemblyresolution 42/2017/QH14.

Hung said handling bad debts was a hard job as the bankingsystem was responsible for providing credits for the economy as well as forimplementing restructuring and handling bad debts.

The central bank is completing circulars about credit riskmanagement in sectors such as real estate, securities and build-transfer (BT)and build-operate-transfer (BOT) projects and internal audit to prevent risks.

According to Trinh Quoc Trung from the University of Economicsand Law, it is critical to improve the management capacity of creditinstitutions to ensure the safe operation of the banking system.

Trung said detailed instructions to implement Resolution 42 mustbe issued.

Economic expert Nguyen Tri Hieu said the handling of bad debtsalso required the co-operation of relevant agencies such as police and localauthorities to effectively handle mortgaged assets.

He said transparency in shareholdings at banks must also beimproved.

Resolution 42 allows individuals to buy bad debts. But the lackof debt trading market also hindered the handling of non-performing loans, Hieusaid, adding the development of such a market must be of great importance.

A report by the National Financial Supervisory Commission showsthat some 70 trillion VND (3.07 USD) worth bad debts were handled in 2017,rising by 40 percent over the previous year.-VNA