The Viet Nam Asset Management Company (VAMC) has announced reference interest rates applied in the first quarter of 2018 on bad debts it had purchased.

Accordingly, the rate for bad debts in Vietnamese dong was reduced from 9.9 per cent in the fourth quarter of 2017 to 9.8 per cent.

The rates for debt in US dollar and euro were kept the same at 4.9 per cent and 4.7 per cent, respectively.

The reference interest rates were calculated on the basis of the average 12-month term deposit rates of four State-owned commercial banks, including Agribank, BIDV, Vietinbank and Vietcombank, plus the average net interest margin.

VMAC announced the quarterly reference rates following Circular 19/2013/TT-NHNN on the purchasing, selling and handling of bad debts.

The interest rates were applied on debtors with non-performing loans VAMC had bought from credit institutions.

From 2013 until the end of September 2017, VAMC had bought bad debts from 42 credit institutions worth VND301.1 trillion (US$13.2 billion) in original value at the price of VND207.9 trillion.

To date, VAMC handled some VND60 trillion.

The banking system handled bad debts worth VND705 trillion from 2012 to November 2017, according the the State Bank of Viet Nam’s statistics. — VNS