HA NOI (Biz Hub) — The State Bank of Viet Nam (SBV) has asked the Government to increase the charter capital of Viet Nam Asset Management Company (VAMC).

SBV Deputy Governor Nguyen Thi Hong made the announcement, saying the move aims to enhance the company's financial capacity to buy and sell bad debts at prevailing market prices.

VAMC's current charter capital is VND500 billion (US$23.58 million), which is just modest in comparison with the total non-performing debts that the company has to deal with.

SBV figures showed that in the first 10 months of 2014, VAMC bought bad debts worth around VND125 trillion ($5.9 billion) and resold bad debts worth VND4 trillion ($190.4 million) to the public. There was a proposal to increase the VAMC charter capital to VND2 trillion.

The figures also showed that from time the project to resolve bad debts in the Vietnamese banking system was implemented in 2012, the country's bad debt ratio was reduced from 17 per cent, at VND460 trillion, to 5.43 per cent, at VND252 trillion.

Hong said the SBV and credit institutions differed in the way they accounted for bad debts, resulting in conflicting figures.

Reports of credit institutions showed that the bad debt ratio had declined from 4.17 per cent by end-June to 3.88 per cent by end-September.

The SBV said regulations on VAMC operations that restricted the company from using the State budget to resolve bad debts were placed under review to reduce the company's difficulties. — VNS