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Banks require clearer regulations on mortgaged assets
While discussing the bill on registering guaranteed transactions, bankers said that the provisions needed to be clear enough to define the real situation of the assets registered as the mortgage for loans.
Immovable properties now are the main kind of mortgaged asset used for borrowing money from banks.
Bankers complain that with the current regulations, they do not know the real situation of mortgaged assets. In some cases, asset owners have used the same assets as collateral for loans from multiple banks, and the total amount of the loans was higher than the value of the assets.
Duong Thu Huong, Secretary General of the Vietnam Banking Association (VNBA), said that a lot of disputes have broken out regarding the use of mortgaged assets to get multiple loans. Many people have been taken to court.
Under the Civil Code, one asset can be used as mortgage to borrow money from more than one bank.
Therefore, Huong said, it is necessary to make public the information about the legal status of assets.
“Bankers need to have information about the legal status of assets to make decisions on whether to accept assets as mortgage and whether to give loans,” Huong said.
Registering guaranteed transactions is done when asset owners register at management agencies to use assets as collateral to borrow money from banks, or conduct other jobs that need a guarantee on assets. The registering is applied for land, forest, sea water, construction work, aircraft and ship use rights.
Sharing the same viewpoint as VNBA Secretary General Duong Thu Huong, Deputy Governor of the State Bank of Vietnam Nguyen Dong Tien said that it is necessary to well structure the information exposure system to provide accurate information about the situation of mortgaged assets.
Tien cited several examples, in which vehicles’ owners used driving licences and vehicle ownership registration documents as collateral to get loans from banks. After that, the owners asked management agencies to grant the documents again, reasoning that the documents were lost. After getting the new documents, the owners sold the assets which they mortgaged at banks.
Under the bill on registering guaranteed transactions, the registration of assets, except land, aircrafts and ships, is valid for five years. The agencies, which receive registrations, will be responsible for updating information about the mortgaged assets into the national database.
However, immovable properties are not mentioned in the bill, while the related regulations will be stipulated in the Real Property Registration Law. Huong from VNBA said that this will put difficulties on banks as banks will have to refer to many legal documents and contact different state management agencies when they need to seek information about the legal status of mortgaged assets.
Immovable properties now are the main kind of mortgaged asset used for borrowing money from banks. Meanwhile, it is very difficult to define the legal status of the assets.
VNN
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