Comparing Vietnamese and US laws on handling overdue debts at joint stock commercial banks

HANOI NATIONAL UNIVERSITY

FACULTY OF LAW

DO THI XUAN PHUONG

COMPARISON OF VIETNAMESE AND US LAWS ON HANDLING OVERDUE DEBT AT JOINT STOCK COMMERCIAL BANKS

MASTER'S THESIS IN LAW

HANOI NATIONAL UNIVERSITY

FACULTY OF LAW

DO THI XUAN PHUONG

COMPARISON OF VIETNAMESE AND US LAWS ON HANDLING OVERDUE DEBT AT JOINT STOCK COMMERCIAL BANKS

Major : Economic Law

Code : 60 38 50

MASTER'S THESIS IN LAW

Scientific supervisor : Associate Professor, Dr. NGUYEN NHU PHAT

Commitment

I hereby declare that this is my own scientific research work. The figures, examples and quotations in the thesis ensure reliability, accuracy and honesty. The scientific conclusions of the thesis have never been published in any other work.

Thesis author

Do Thi Xuan Phuong

Cover Page Pledge Table of Contents

List of abbreviations List of diagrams

INDEX

Page

INTRODUCTION 1

Chapter 1: OVERVIEW OF OVERDUE DEBT AND HANDLING OF OVERDUE DEBT IN LENDING ACTIVITIES OF THE BUSINESS

JOINT STOCK COMMERCIAL BANK6

1.1. CONCEPT OF OVERDUE DEBT 6

1.1.1. Overdue debt according to international standards 6

1.1.2. Overdue debt from Vietnam's perspective 7

1.2. CAUSES AND EFFECTS OF OVERDUE DEBT 9

1.2.1. Cause 10

1.2.2. Impact of overdue debt in commercial banking operations

shares to the economy 12

1.3. METHOD OF JOINT STOCK COMMERCIAL BANK

HANDLING OVERDUE DEBT ARISING 15

1.4. BAD DEBT HANDLING MODELS IN COUNTRIES 17

1.4.1. Some models of overdue debt handling in the world 17

1.4.2. Lessons learned for Vietnam 23

Chapter 2: VIETNAMESE LAW AND US LAW ON HANDLING OVERDUE DEBT IN BUSINESS ACTIVITIES

JOINT STOCK COMMERCIAL BANK 25

2.1. VIETNAMESE LAW 25

2.1.1. Basis for determining overdue debt in lending activities of joint stock commercial banks in Vietnam 25

2.1.2. Managing and limiting overdue debt in lending activities

Vietnam Joint Stock Commercial Bank 28

2.1.3. Measures to handle overdue debt in the operations of joint stock commercial banks 30

2.1.4. Procedures for handling overdue debts in lending activities of

Joint Stock Commercial Bank 32

2.1.5. Purchase of overdue debts of joint stock commercial banks by debt trading company 40

2.2. US LAW 50

2.2.1. Basis for debt classification in the United States 50

2.2.2. Main measures to handle overdue debt in the United States 52

Chapter 3: SOLUTIONS TO IMPROVE THE EFFICIENCY OF BAD DEBT HANDLING IN THE COMMERCIAL BANKING SYSTEM

SHARES IN VIETNAM 66

3.1. SOLUTIONS TO IMPROVE TREATMENT EFFICIENCY

BAD DEBT AT JOINT STOCK COMMERCIAL BANKS ... 66

3.1.1. Building a process for handling overdue debt 66

3.1.2. Diversify measures to handle overdue debt 67

3.1.3. Increasing the effectiveness of direct debt collection 68

3.1.4. Joint stock commercial banks are more flexible in debt trading transactions 69

3.1.5. Securitization of debts 71

3.1.6. Establishing and using risk reserve funds effectively 74

3.1.7. Strengthening the operations of debt management and asset exploitation companies 75

3.2. SOME SPECIFIC RECOMMENDATIONS 77

3.2.1. Recommendations for improving the legal basis 77

3.2.2. Recommendations to the State Bank 86

3.2.3. Other recommendations 88

CONCLUSION 91

LIST OF REFERENCES 93

LIST OF ABBREVIATIONS

AMC

Debt Management and Asset Exploitation Company
DATC	Debt and Assets Trading Company - Debt and Assets Trading Company Debt and outstanding assets of enterprises - Ministry of Finance
State-owned enterprises	State-owned enterprise
Business	Business activities
Commercial Bank	Joint Stock Commercial Bank
State Bank of Vietnam	State-owned commercial joint stock bank
Commercial Bank	Joint Stock Commercial Bank
TCTD	Credit institution
TSBD	Collateral