In the context of increasing bad debts, the creation of a
debt trading market is an indispensable factor, according to Mr. Deepak Mishra,
the World Bank (WB)'s chief economist.
He said that currently the
state-owned enterprises (SOEs) accounted for up to 60% of total loans of banks
and credit institutions. In which, the debts of these enterprises are making up
to 70% of banks' bad debts.
So far, the total outstanding
loans nationwide have been at about 2.4 million billion Vietnamese dong and
non-performing loans accounted for 3.2%, equivalent to 76 trillion dong.
According to the State Bank of Vietnam (SBV)'s statistics, of the total the bad
debts, debts in category 5 (irrecoverable debts) accounted for nearly 50%, or
about 38 trillion dong.
The acquisition and settlement
of debts in Vietnam are currently mainly based on Debt and Assets Trading Corp
(DATC) – 100% state-owned company under the Ministry of Finance, which is
assigned to manage SOEs’ debts and assets as well as to assist the rearranging
and ownership transferring process at these enterprises.
Data from DATC showed that till
the end of 2010, the value of debts through debts and assets trading activities
recovered by DATC reached 1.597 trillion dong, or 85.5% of the debt that DATC purchased
and revenue from selling assets reached 464 billion dong.
This number is insignificant
compared with the current debt market, but this will be the premise for the
formation of the debt trading market. However, to date, the legal framework for
DATC's business activities has been incomplete and still remained inadequate
and limited.
Under corporate law, the state
is the owner to grant chartered capital for DATC and DATC has civil liability
for the scale of that capital. Assets (including commodities) are the property
of enterprises, businesses bear civil liability with that entire property.
However, according to the
Financial Policy Advisory Group, the owner also can deeply intervene into
business activities of enterprises, especially in debt trading activities.
Proposing solutions for the
debt restructuring, many experts said that the debts and assets that DATC is
trading are commodities for business, so the creation of a debt trading market
is an indispensable factor.
Debt trading market should have
the participation of a number of state-owned debt trading companies and
non-state economic organizations, of which the DATC will be the key unit in the
model.
VietBiz24
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.
No comments:
Post a Comment