On July 23, 2025, in an interview with the People’s Army Newspaper, Dr. Nguyen Thanh Nam, Lawyer, Standing Vice President cum Secretary General of the Vietnam Trade and Investment Arbitration Center (VTIAC), stated:
The increase in non-performing loans (NPLs) among banks is an inevitable trend, considering several domestic factors and recent global economic fluctuations. Consumers are tending to tighten spending, and many businesses are facing difficulties due to declining product demand. A noteworthy point is the recent surge in capital flows into real estate, as banks have relaxed lending policies in this sector to maintain credit growth. While this has generated profits for banks, it also carries significant risks given the substantial rise in property prices in recent times. Specifically, certain joint stock commercial banks such as SaigonBank, VIB, and PGBank have recorded a sharp increase in their NPL ratios during the first half of the year.
To curb the rise of bad debts, Dr. Nam emphasized that credit institutions (CIs) must focus on risk management, develop early warning systems, and prevent the formation of new NPLs. The handling of bad debts must be addressed at its root — from the stages of credit product design, credit portfolio orientation, and risk governance — as debt resolution is ultimately the final recourse.
CIs should regularly review and revise the terms and conditions in template credit agreements and security (collateral) agreements to ensure compliance with current legal regulations. In particular, they should include provisions on the repossession of secured assets in standard security contracts to serve as a legal basis for enforcement in line with new legislative changes. CIs also need to promulgate internal procedures for NPL handling and detailed internal regulations for each debt recovery measure to ensure legal compliance and operational effectiveness. A specific action plan must be formulated for each NPL case, taking into account the borrower’s real financial situation, the condition of the debt, and the value of the collateral. One effective measure to prevent and manage bad debts is for banks to establish partnerships with reputable commercial arbitration centers, creating a fast-track dispute resolution mechanism. This helps to shorten the debt recovery timeline and is a growing trend among CIs, as it provides a viable alternative to traditional court litigation, which is often time-consuming.
Read full at: https://www.qdnd.vn/kinh-te/cac-van-de/tao-co-che-thuan-loi-trong-xu-ly-no-xau-838128
___________________________________
VIETNAM TRADE AND INVESTMENT ARBITRATION CENTER
M: 0934565488 | W: http://vtiac.vn/ | E: vtiac.contact@gmail.com
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The increase in non-performing loans (NPLs) among banks is an inevitable trend, considering several domestic factors and recent global economic fluctuations. Consumers are tending to tighten spending, and many businesses are facing difficulties due to declining product demand. A noteworthy point is the recent surge in capital flows into real estate, as banks have relaxed lending policies in this sector to maintain credit growth. While this has generated profits for banks, it also carries significant risks given the substantial rise in property prices in recent times. Specifically, certain joint stock commercial banks such as SaigonBank, VIB, and PGBank have recorded a sharp increase in their NPL ratios during the first half of the year.
To curb the rise of bad debts, Dr. Nam emphasized that credit institutions (CIs) must focus on risk management, develop early warning systems, and prevent the formation of new NPLs. The handling of bad debts must be addressed at its root — from the stages of credit product design, credit portfolio orientation, and risk governance — as debt resolution is ultimately the final recourse.
CIs should regularly review and revise the terms and conditions in template credit agreements and security (collateral) agreements to ensure compliance with current legal regulations. In particular, they should include provisions on the repossession of secured assets in standard security contracts to serve as a legal basis for enforcement in line with new legislative changes. CIs also need to promulgate internal procedures for NPL handling and detailed internal regulations for each debt recovery measure to ensure legal compliance and operational effectiveness. A specific action plan must be formulated for each NPL case, taking into account the borrower’s real financial situation, the condition of the debt, and the value of the collateral. One effective measure to prevent and manage bad debts is for banks to establish partnerships with reputable commercial arbitration centers, creating a fast-track dispute resolution mechanism. This helps to shorten the debt recovery timeline and is a growing trend among CIs, as it provides a viable alternative to traditional court litigation, which is often time-consuming.
Read full at: https://www.qdnd.vn/kinh-te/cac-van-de/tao-co-che-thuan-loi-trong-xu-ly-no-xau-838128
___________________________________
VIETNAM TRADE AND INVESTMENT ARBITRATION CENTER
M: 0934565488 | W: http://vtiac.vn/ | E: vtiac.contact@gmail.com