On July 01, 2015, the Prime Minister signed the Decision No. 976/QD-TTg prescribing the regulations on classification of debt at Vietnam Bank for Social Policies (VBSP) and requires VBSP to have solutions and regularly collect information on its customers in order to assess their solvency, take appropriate measures to control risk and credit quality, and classify debts in accordance with this Regulation.

Accordingly, VBSP shall classify debts in accordance with this Regulation on every year on December 31 VBSP shall classify debts by loan program; by loan term; by status; by type of loan security; by source; by loan method and trustee under an entrustment contract with VBSP; by area; by ethnic group; by economic sector; by customers’ solvency. Particularly, in classification of debts by customers’ solvency, every 03 years or whenever necessary, VBSP shall review, analyze, and assess the ability its customers to pay each special debt, especially overdue debts, bad debts, undue debts that are irrecoverable, unpaid interest. Assessment of solvency enterprise analysis of causes of insolvency shall be carried out in a public, democratic, and fair manner among borrowers under each credit program. Credit teams of communes and districts shall be established to carry out these tasks. According to the analysis and assessment of debt balance and analysis of causes of insolvency, the VBSP shall take appropriate measures to improve credit quality and avoid irrecoverable debts. Classification of debts at VBSP varies according to the actual balance of each debt. If part of a debt is converted into overdue debt in a repayment period, only the converted amount is considered overdue, the remaining balance is still considered undue debts.
This Decision takes effect on the signing date.


Source: LuatVietnam