NPL workout scheme of the Vietnam Asset Management Company (VAMC)

Abstract

The Scheme for restructuring the system of credit institutions (2011-2015) approved by the Prime Minister’s Decision
No. 254/ QD-TTg dated 01/3/2012 (Project 254) has been actively implementing by the State of Vietnam (SBV) with
one of the core elements of resolving non-performing loans (NPL). Accordingly, the debt workout scheme and the
new asset management company proposal approved by Decision No. 843/QD-TTg dated May 31,2013 of the Prime
Minister have created a solid background for establishing the Vietnam Asset Management Company (VAMC) which
was formally established and come into being on 26 July, 2013. This newly established vehicle is expected to help
manage and sell a significant stock of NPL of the system, thus contributing to the restructuring of the banking system.
After 3 years of operation, the VAMC has gained certain achievements but faced with significant challenges in debt
workout. This paper covers analytical works on the challenges embedded in debt workout scheme of the VAMC;
proposes solutions for dealing with those challenges in order to improve the debt workout scheme of the VAMC as well
as of the credit institutions themselves