HCMC – The Government has introduced a new rule requiring commercial banks to provide financial support to borrowers when seizing collateral that serves as their only home or essential work tool.

Government Decree 304/2025, which took effect on December 1, outlines conditions for repossessing assets linked to bad debts, the Vietnam News Agency reported. Under the decree, banks must allocate an amount equal to 12 months of minimum wage if they seize a borrower’s sole residence. The money is taken from the asset-handling cost and is intended to help borrowers cover basic living expenses during the transition period. If the repossessed asset is a borrower’s primary or only work tool, not purchased with loan funds and verified by authorities, the bank must provide support equal to six months of minimum wage. The regulation requires lenders to ensure borrowers retain minimum resources to maintain daily life and reduce disruptions to income-generating activities when their only home or essential work tools are seized. The State Bank of Vietnam said the decree aims to balance the rights of lenders and borrowers and ensure repossession procedures comply with regulations while limiting the impact on financially stressed households.