Vietnam toughening up on non-performing debt
(Vietnam) - Vietnam's Central Bank is encouraging the country's state commercial banks to deal with about VND7 trillion (US$467 million) of non-performing loans (NPLs) this year.
The commercial banks are currently appraising such loans, having already dealt with an estimated one-fifth (VND4 trillion) of the industry's total VND23 trillion bad loan stockpile.
Many of these NPLs result from lending programs under the Government's direct control, including the sugar industry development program, building residential flood-resistant housing in the Mekong Delta, the cement industry expansion scheme and the offshore fishing program.
Such restructuring is the first step in Vietnam's banking reform program aimed at increasing the competitiveness of the sector, to be followed by new funding for state banks and lifting their management performance by 2006.
Many of these NPLs result from lending programs under the Government's direct control, including the sugar industry development program, building residential flood-resistant housing in the Mekong Delta, the cement industry expansion scheme and the offshore fishing program.
Such restructuring is the first step in Vietnam's banking reform program aimed at increasing the competitiveness of the sector, to be followed by new funding for state banks and lifting their management performance by 2006.
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