However, what VAMC will do to deal with this huge amount of debt remains a big open question.

Vice Chairman of VAMC Board of Directors Nguyen Quoc Hung says the company’s NPL purchase is progressing but it needs more time to review loans.

“We are in the process of classifying and restructuring loans, together with banks, to help ease businesses difficulties and shore up production,” he says.

VAMC is reviewing loans and considering appropriate interest rates, enabling businesses to get more capital and pay back to the bank, he adds.

Settling the bought debt is no easy task, Hung admits, adding selling debt at a low price is not a good solution.

He goes on to reveal a number of domestic and foreign investors plan to re-purchase VAMC’s bought debt, but there are legal barriers including asset and share ownership that need to be addressed soon.

Dr Le Xuan Nghia, former vice chairman of the National Finance Supervision Committee, reports several foreign investment funds are exploring Vietnam’s debt market and want to purchase loans from VAMC. Yet, incomplete legislation prevents them from accessing such debt.

Currently, the Ministry of Justice is drafting a document allowing VAMC to sell its guaranteed asset to recover debt. The document will create a legal corridor for VAMC to re-sell its assets quickly and conveniently.

Under the draft document, the guaranteed asset will be tackled with the agreement of parties concerned, and if no agreement is reached, bids will be invited for it.

VAMC aims to purchase VND10 trillion worth of NPLs in the first quarter of this year.