 The State Bank of The debts dropped from 4.55 percent last November to 3.61 percent in December, when the Vietnam Asset Management Company (VAMC) made a number of major purchases. The debts quickly rose to 3.74 percent in January. The Central Bank established the VAMC last July to rescue debt-laden lenders by exchanging their bad debts for a “special bond” redeemable for loans from the central bank. But insiders said the sharp shifts in the bad debt ratios from month to month has undermined the effectiveness of the organization. The central bank earlier said that the VAMC bought nearly VND4 trillion (nearly US$188 million) worth of bad debts from ten banks in the first quarter of this year. At the time, Chief Inspector Nguyen Huu Nghia described this year’s target purchase of VND70-100 trillion of bad debt "feasible." A combination of cautious banks and troubled businesses played a major role in the increase of the bad debt ratio, the report said. |
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