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|The central bank has officially guided credit institutions on granting a legal confirmation in written document for vehicles used as bank collateral. - Photo 24h.com.vn|
According to Document 7000/NHNN-PC, credit institutions and branches of foreign banks receiving the collateral of vehicles, or mortgagees, will have to grant a mortgage receipt for borrowers, or mortgagors.
In cases where the mortgagors violate the obligation to pay debts secured by vehicles, mortgagees and mortgagors will have to reach an agreement.
The validity term of the mortgage receipt must be agreed to by mortgagees and mortgagors, but must not be beyond the effective term of the mortgage contract.
The renewal issuance of a mortgage receipt is made in two cases, when the mortgage receipt is damaged, or when information on the mortgage receipt needs to be changed.
Credit institutions must co-operate with the traffic police in information exchange when required.
The move was made after the SBV received multiple complaints from credit institutions and companies recently, stating that the traffic police refused to accept copies of vehicle registration certificates in place of the originals, which had been submitted to secure loans.
Further confusion arose when a bank-issued confirmation of the vehicle’s use as collateral was also not accepted by the traffic police.
The situation has inconvenienced creditors, banks and other credit institutions, as not holding the original documents of collateral ownership increases risks to them, which may lead to them ceasing to accept automobiles as collateral.
This would make it harder for citizens and businesses to get loans, while at the same time not allowing credit institutions to hold either the collateral or its certificate of ownership incurs significant risk.
To deal with this, on August 15 this year, Deputy Prime Minister Truong Hoa Binh issued a decision, allowing drivers to use a certified copy of vehicle registration certificate and the original mortgage receipt granted by credit institution, in lieu of the original of the vehicle registration certificate for movement on the Vietnamese territory during the time the credit institutions hold the original.
The Deputy PM also entrusted the SBV to grant the above mortgage receipt.