In the face of rising bad debt amid the ongoing COVID-19 pandemic, commercial banks have been forced to write up their loan loss provisions, according to industry sources.

Many businesses suggested more detailed policies should be issued to help them access bank loans as there remain difficulties in lending.

The State Bank of Vietnam (SBV) has proposed to issue a separate law on bad debt settlement.

The COVID-19 pandemic is significantly changing the landscape of the consumer credit market as consumers tend to tighten their budget and pay more attention to healthcare, environment and lifestyle as well as switching to online shopping.

The State Bank of Vietnam (SBV) has decided to extend a policy allowing commercial banks to keep debt classifications for COVID-19 affected borrowers unchanged to help customers access bank loans.

A proper mechanism is needed to attract investors to infrastructure projects implemented following the public-private partnership (PPP) model, experts have said.

Non-performing loans (NPLs) among commercial banks increased sharply in the first three quarters of this year due to the adverse impacts of the COVID-19 pandemic.

The Government has directed the State Bank of Vietnam (SBV) to add non-performing loan (NPL) settlement regulations under Resolution No.42/2017/QH14 into the revised Law on Credit Institutions, SBV Deputy Governor Nguyen Kim Anh has said.

Non-performing loans are still increasing despite slow credit expansion as the COVID-19 pandemic stretches many businesses to their limits.

There has been a major reshuffle in profit rankings at the top of the banking industry due to the effects of the pandemic and provisioning for bad debts.