On Jun. 27, 2025, VIE CB said VIE PRL passed amendments to the Law on credit institutions; VIE CB will enhance supervisory role, especially on non-performing loans.
The amendments take effect from Oct. 15, 2025.
Document dated Jun. 27, 2025, received from VIE CB Jun. 30, summarized on Jul. 3.
On Feb. 27, VIE CB proposed revision to Law on credit institutions.
VIE CB drafted law introducing amendments to Law on credit institutions, introducing 3 new articles to strengthen legal framework for handling bad debts and secured assets.
Also issued draft policy impact assessment report and detailed outline of the draft law.
New Articles
Article 198a grants credit institutions right to seize collateral under strict conditions.
Article 198b protects collateral from unrelated debt enforcement unless legally justified, while article 198c mandates return of seized collateral used as legal evidence.
The law will be presented to the 15th National Assembly of Vietnam during its session in 2025, but specific details on the session and approval date are yet to be finalized.
Consultation Period
The comment period for this consultation has not been mentioned.
Mar. 2025 Law Drafted
On Mar. 12, 2025, VIE CB issued proposed revisions to Law on credit institutions to legalize key provisions from res 42/2017/QH14 concerning a framework for bad debt.
To enhance financial stability, improve credit flow, remove institutional bottlenecks.
Seeks to streamline debt recovery by granting credit institutions right to seize collateral, ensuring bad debt-related collateral is not misused in other debt settlement.
As well as defining procedures for the return of seized collateral in criminal cases.
Applies to credit institutions, foreign bank branches, and state-owned debt settlement entities, ensuring consistency with existing financial laws, international agreements.
VIE CB has consulted ministries, commercial banks, legal experts to refine proposal.
Apr. 2025 Standing Committee Review
On Apr. 24, 2025, VIE CB said VIE PRL Standing Committee reviewed above proposal.
Chairman Tran Thanh Man agreed with codifying provisions from res 42 versus issuing a new resolution, as repeatedly extending res 42's validity has been time-consuming.
He additionally emphasized the need to incorporate effective provisions from res 42 while addressing identified limitations to make the law more comprehensive.
Committee stressed importance of clearly defining policy scope for compliant loans to prevent institutions from relaxing lending conditions, which could lead to liquidity risks.
Committee approved presenting draft law at VIE PRL 9th session following single-session expedited procedure; while agreeing with proposal, requested reports on two transitional policy groups: zero-interest special loans, 3 codified policies from res 42.
VIE GVT directed to clarify political, legal bases for policies, assess obstacles in non-performing loan handling, analyze causes of non-performing loans, quantify impact of proposed policies; committee emphasized transparency, objectivity, and feasibility.
May 2025 Presentation of Draft Law
On May 13, 2025, VIE CB said its Governor will present draft amending/supplementing the Law on credit institutions at upcoming 9th session of the 15th National Assembly.
Adds provisions on the right to seize secured assets as evidence in criminal cases and on the return of secured assets as evidence and means of administrative violations.
Stipulates conditions, order, procedures for seizure; bans the application of measures that violate laws/social ethics; credit institutions must issue internal regulations, while agencies such as police will prevent abuse, ensure order and the rights of all parties.
Transfers the authority to decide on special loans for credit institutions to VIE CB.
May 20, 2025 Draft Law Presented
On May 20, 2025, VIE CB presented draft law to amend the Law on credit institutions, aiming to codify res 42/2017 on bad debt resolution and enhance credit system safety.
Key changes include transferring authority for special loans to VIE CB, introducing new provisions on collateral seizure, asset enforcement, returning evidence re bad debts.
May 29, 2025 VIE PRL Debate
On May 29, 2025, VIE PRL reported on debate re above amendments with delegates raising concerns about 0% interest special lending criteria and control mechanisms.
Multiple delegates raised concerns, calling for specific criteria and control mechanisms to prevent policy abuse; delegate Nguyen Huu Thong (Binh Thuan) said unconditioned 0% interest rates could lead to policy abuse, create market distortions, among others.
Delegate Tran Thi Thu Dong (Bac Lieu) recommended periodic reporting requirements to VIE GVT and VIE PRL on special lending recipients, amounts, terms, and results.
Nguyen Quang Huan (Binh Duong) supported strong VIE CB authority but suggested requiring reports to VIE GVT at nearest meeting following special lending decisions.
VIE CB Governor Nguyen Thi Hong explained authority transfer to VIE CB enables faster response to urgent bank run situations requiring immediate action.
Clarified 0% special lending applies only in exceptional circumstances, particularly during mass withdrawals that could spread systemically; emphasized institutions under early intervention can access special lending but must pay interest rates.
Noted difficulty in setting specific criteria given each institution faces different circumstances, with bank runs sometimes occurring due to rumors or technology failures rather than institutional weakness; explained unsecured special lending.
Namely, unsecured special lending only occurs when institutions have exhausted collateral assets, with VIE CB prioritizing the relevant high-liquidity collateral assets.
Document dated May 29, 2025, received from VIE PRL May 30, summarized on Jun. 4.
May 30, 2025 VIE CB Clarifications
On May 30, 2025, VIE CB reported on explanations provided by Governor Nguyen Thi Hong re 0% special lending policy and resolution 42 implementation on May 29, 2025.
Legalizing provisions creates stable, long-term legal foundation for more effective bad debt handling while protecting credit institutions, depositors, and borrowers.
Governor emphasized credit institution lending funds represent public deposits, making institutional protection synonymous with depositor protection; provisions align with resolution 68 on private economic development, ensuring property rights protection.
In addition to contract enforcement; addresses international organization guidance for Vietnam to establish lender protection regs strengthening financial system safety.
Document dated May 30, 2025, received from VIE CB May 31, summarized on Jun. 4.
Jun. 2025 VIE CB Amendment Report
On Jun. 10, 2025, VIE CB presented report on Credit institutions law amendment draft.
VIE CB will review and revise circular 37/2024/TT-NHNN re criteria and conditions for special lending; collateral asset seizure activities subject to state management, inspection and supervision including by VIE CB, to respect voluntary agreement rights.
Amendment provisions are consistent with Criminal procedure law, Civil judgment execution law, and Administrative violation handling law; in addition, they supplement legal framework for bad debt handling and resolve previously unregulated issues.
Asset seizure handling and payment procedures align with Civil law and Obligation guarantee law requirements; VIE GVT directed to continue review and issue guidance documents as necessary without specific agency delegation within the draft law.
Jun. 27, 2025 Amendments Passed
On Jun. 27, 2025, VIE CB said VIE PRL passed amendments to the Law on credit institutions; VIE CB will enhance supervisory role, especially on non-performing loans.
The amendments take effect from Oct. 15, 2025.
Document dated Jun. 27, 2025, received from VIE CB Jun. 30, summarized on Jul. 3.
