The establishment of an assets management company (AMC) will be delayed due to the limited options in dealing with bad debts.

The establishment of an assets management company has been delayed for at least a month

At a banking meeting in Danang City on March 20, Governor of the State Bank of Vietnam Nguyen Van Binh said the AMC might be set up by March 23. However, Vu Duc Dam, chairman of the Government Office said at a regular press meeting on March 29 that the work would be delayed.

This company would work under the State Bank of Vietnam as a help to resolve bad debt. However, the proposed regulations have not gained support from the state officials at the regular government meeting in March.

According to the draft plan, AMC will only deal with bad debts in the inter-banking market while it has been hoped to be able to resolve the bad debt between banks and businesses.

"The establishment will be delayed at least until next regular government meeting next month. Ministries and state agencies must quickly complete the draft plan and prepare more detailed regulations in the mean time," Dam said.

He further said even though the AMC's formation had been delayed, it still tried to gradually deal with bad debts. However bad debts could not disappear immediately.

"The AMC is only one of many measures must take to limit bad debts," he said.

The business community strongly expected the launch of the company despite various controversies. The AMC is supposed to play an important role in controlling bad debts which is the main culprit for weak liquidity in the banking system.