Understanding Circular 31/2025/TT-NHNN: Guidelines for Subsidiaries and Affiliates in Debt Management and Asset Exploitation

On September 30, 2025, the Governor of the State Bank of Vietnam issued Circular 31/2025/TT-NHNN, which outlines the operational framework for subsidiaries and affiliates of credit institutions involved in debt management and asset exploitation. This regulation is essential for credit institutions, including commercial banks and financial companies.

Main Content Overview

This article delves into the critical aspects of Circular 31/2025/TT-NHNN, including its main provisions and principles governing subsidiaries and affiliated companies.

1. What is Circular 31/2025/TT-NHNN?

Circular 31/2025/TT-NHNN applies to:

• Subsidiaries and affiliates of commercial banks.
• Organizations involved in debt management and asset exploitation, collectively known as “debt management companies.”
• Financial institutions that have these debt management companies as part of their operations.

2. Principles of Operation

According to Article 3 of Circular 31/2025/TT-NHNN, debt management companies and credit institutions must adhere to specific principles while conducting their operations:

1. Scope of Activities: Debt management companies can only engage in activities specified in Article 4 of the circular. It is the responsibility of the credit institutions to ensure compliance with these operational limits.

2. Transparency: Operations concerning buying and selling debts and securing assets must be conducted transparently and in compliance with legal regulations.

3. Legal Rights and Interests: The rights and legal interests of all parties involved, including debt management companies and relevant stakeholders, must be safeguarded.

4. Debt Purchases: Debt management companies, as subsidiaries of credit institutions, can purchase debts only under certain conditions:

   • The parent organization must be legally permitted to engage in debt purchases.
   • The bad debt ratio must be below 3% based on the latest classification, excluding specific restructuring scenarios.

5. Agreements Compliance: The debt purchase and sale contracts must align with the terms of underlying credit agreements.

6. Authorized Operations: Debt management companies may only manage and exploit assets as authorized by their parent credit institution.

3. Permissible Activities of Debt Management Companies

Under Article 4 of Circular 31/2025/TT-NHNN, debt management companies are allowed to perform several activities, including:

• Manage and handle debts under authorization.
• Exploit and manage collateral assets of debts as permitted.
• Lease unused business premises owned by the granting authority within legal confines.
• Engage in debt buying and selling, following the regulatory framework provided.
• Acquire collateral assets linked to non-performing debts.
• Conduct asset evaluations necessary for the aforementioned activities.

Conclusion

Circular 31/2025/TT-NHNN represents a crucial regulation that governs the operations of subsidiaries and affiliates under credit institutions in Vietnam. By ensuring transparency and adherence to legal frameworks, this law plays a significant role in promoting financial stability within the sector.

For further reading and access to the complete text of Circular 31/2025/TT-NHNN, you can follow the link: luật.

As the effective date for this law approaches on December 1, 2025, institutions involved in debt management should familiarize themselves with its contents to ensure compliance and operational efficiency.