12+ Solving security assets (collateral), collecting debts to the end from customer+ Debt re-structuring by: selling off the debts, transforming the debt into equity,re-scheduling the debt, and rolling over3.4.2 Financial re-structuring
Re-capitalizationAs of now, SOCBs’ statutory capitals have been injected with nearly 13.000billion dongs bythe Ministry of Finance from the source of special Government bonds and othersources; increasingSOCB’s total statutory capitals to 17.000 billion dongs, step-by-step raisingequity, significantlyimproving capital adequacy ratio in consistency with international standards(8%). Joint-stock commercial banks have also continuously issued shares to call forequity fromshareholders and the public. Almost all joint-stock commercial banks havereached the capitaladequacy ratio in accordance with the State Bank of Vietnam’s regulations.-Solution of NPL90% of NPLs incurred before 31/12/2000 have been solved by such measures as:collection in cash, solution of security assets (collateral), using provisions forrisks… and theGovernment has also assisted by the State budget. As of now, joint-stockcommercial banks’NPLs are below 5% of the total debt outstanding (by the Vietnamese AccountingStandards).
III. Prospects for the Vietnamese Banking Sector in the comingtime
As of 31/12/2004, Vietnamese commercial banks have basically solved all oldproblems,creating basis to apply stronger measures in the upcoming time, when Vietnam joins the WTO andopens the markets as required under the US-Vietnam Bilateral Trade Agreement.Vietnam needs topush up liberalization of services of the financial and banking sector.In the coming time many foreign banks will be operating in Vietnam with manynew bankingproducts and services. This requires the Vietnamese banking system to furtherreform:+ About policy, legal environment: the Government and the State Bank of Vietnam have to revise,supplement, promulgate new regulations on banking activities, first and foremostregulations onaccounting, debt classification, allocation of provisions against risks, prudentialratios in bankingactivities in consistency with international standards and best practices; ensuringevery entityoperating in Vietnam in the same operation sector has the same rights andresponsibilities, without