Proposal to assign the State Bank to decide on special loans with 0% interest rate and no collateral

Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong said that bad debt of the credit institution system has remained high over the past time, concentrated in a number of weak credit institutions that have been identified by the SBV and placed under special control.

This issue is putting pressure on the banking sector, especially in the context that 2025 is identified as the year of acceleration and breakthrough to reach the finish line.

According to the Governor of the State Bank, the promulgation of the Law amending and supplementing a number of articles of the Law on Credit Institutions continues to legalize the provisions of Resolution No. 42/2017/QH14 to create a synchronous legal framework on bad debt handling, ensuring compliance with reality to handle obstacles and difficulties that have been preventing credit institutions, foreign bank branches, debt trading and handling organizations from exercising their legal rights in handling bad debts and secured assets.

At the same time, amend and supplement the authority to decide on special loans of the State Bank in the direction of transferring the decision-making authority from the Prime Minister (for cases of special loans with 0% interest rate/year, special loans without collateral) to the State Bank in order to thoroughly decentralize and delegate authority to the State Bank in deciding on special loans.

National Assembly leaders chair the 44th session of the National Assembly Standing Committee

The draft will amend 3 Articles of the Law on Credit Institutions.

In which, amend and supplement Clause 1, Article 193 of the Law on Credit Institutions: Adjust the authority to decide on special loans of the State Bank in the direction of "The State Bank decides on special loans with or without collateral for credit institutions. The collateral of special loans from the State Bank is according to the regulations of the Governor of the State Bank. The special loan interest rate of the State Bank is 0%/year".

State Bank Governor Nguyen Thi Hong speaks

Add Article 198a after Article 198 of the Law on Credit Institutions. Accordingly, Article 198a stipulates the right to seize collateral of credit institutions and debt trading and handling organizations in cases of handling bad debts and handling collateral of bad debts.

Regarding amendments and supplements to regulations related to the authority to decide on special loans with an interest rate of 0%/year, without collateral, Mr. Le Quang Manh, Deputy Chairman of the Economic and Financial Committee, said: The majority of opinions agree with the policy of decentralizing the authority to decide on special loans.

Some opinions say that these cases indirectly use State resources, there is a risk of not being able to recover the loan, there needs to be coordination and consultation from relevant agencies, therefore, the regulation that the Prime Minister decides on lending is necessary and reasonable.

In addition, the Standing Committee of the Economic and Financial Committee proposed to assess the impact of the regulation on applying 0% interest rate/year for all special loans of the State Bank, and assign the Government to specify the criteria and conditions for special loans and have measures to strengthen control, prevent and limit possible losses.

It is recommended to review all provisions of the Law on Credit Institutions 2024 related to the authority to decide on special loans to avoid problems in implementation.

Regarding the transitional provisions (Article 2 of the draft Law), Mr. Le Quang Manh said: The Standing Committee of the Economic and Financial Committee proposed to review and fully and comprehensively identify cases that need to be transitioned, avoiding creating legal gaps or legal conflicts. There are opinions suggesting to evaluate the transitional provisions for credit institutions with special loans that have been decided by the State Bank before the effective date of this Law, according to which "in case of special loans with interest, the interest rate of 0%/year will be applied from the effective date of this Law".

At the same time, it is necessary to clarify the necessity, specific impacts, and implementation resources when adjusting the interest rate to 0% in relation to the current situation and restructuring plan of credit institutions.

Source: https://phunuvietnam.vn/de-xuat-giao-ngan-hang-nha-nuoc-quyet-dinh-cho-vay-dac-biet-lai-suat-0-khong-tai-san-bao-dam-20250424091030214.htm