ABSTRACT This study examines the Vietnam Asset Management company, more specific about the functions and structure. It includes the establishment, objectives, principles of operation, conditions for bad debts purchased, and main activities of Vietnam Asset management Company. The study also deals with bad debt solving process of Vietnam Asset Management Company as well as its weaknesses, causes...The Vietnam Asset Management Company, a powerful legal entity established to restructure the bad debts of the State Bank of Vietnam is expected to help decrease bad debts to manageable levels by 2015. Vietnam Asset Management Company can not solve the bad debt issue alone but will also coordinate with various ministries and sectors. With the bad debts situation in Vietnam recently, the forming of the Vietnam Asset Management Company is a sound and necessity decision. Keywords: Vietnam Asset Management Company, bad debts, non-performing loans, credit institutions Abbreviations: VAMC - Vietnam Asset Management Company AMC - Asset Management Company SBV - State Bank of Vietnam NPL's - Non-Performing Loans DATC - Debt and Asset Management Corporation NAMA - National Asset Management Agency Danaharta - Pengurusan Danaharta Nasional Berhad KAMCO - Korea Asset Management Corporation Financial activities not on the banks' balance sheet Financial activities on banks' balance sheet The value of debts according to its balance sheet account balance Government- owned or government- run INTRODUCTION Bad debts together with bad debts solving is one of the most important problems of Vietnam's economy recently. In 2012, the ratio of nonperforming loans to total loans held by Vietnamese banks reach 4.76% ,exceeding a warning threshold that the such a large amount of bad debts would cause a serious problem. It was then that Vietnam asset management company (VAMC) came into the spotlight. Ever since VAMC was established, it has received so much of attentions from people who work in banking and finance fields, also the citizens. Being a student in banking major, investigating about VAMC interests me so much that I decided to choose the topic of "VAMC “Functions and structure to be my research topic for Finance and Money subject. Solving bad debts is a pressing and necessary task of the economy. Bad debts were like a bone which is stucking in the economy throat. However, bad debts clearing process is not something that could be done fast and quickly within days. It needs the cooperation of not only one but many other fields, as well the support of the goverment, and the coordinate of credit institutions. Those solving NPLs tools have been promoted, AMC is an efficency tool which had been apply in many developed country and archived significantlty success. So how this model will be apply in Vietnam bad debt's situation, how it operate, its tools in purchasing NPLs, its weaknesses and so on... also, this paper focus on VAMC's structure and functions. Within the study, dada from variety source such as the State bank of Vietnam's website, the Goverment's website,... and mainly from Vietnam Asset Management Company' website had been used. The organisation of this paper is as follows. First, I will discuss the reason why having VAMC. Second, what is VAMC and VAMC “ Functions and Structure. The last section is the operation of VAMC ever since it was set up which including achivement, weaknesses and recommendations. CHAPTER 1: VIETNAM ASSET MANAGEMENT COMPANY FUNCTIONS AND STRUCTURE 1. WHY HAVING VAMC? 1.1 Bad debts situation in 2012 - 2013 NPLs in Vietnam are pretty serious. The bad debt ratio of the banking system could be as high as 30 percent, while optimists say the ratio is 20 percent at least. Meanwhile, a lot of banks reported less than 3 percent, and the State Bank said 4.65 percent. The SBV reported that as of July 2013, total NPLs of credit organisations were valued over 138 trillion VND (64.8 billion USD). Following is the debts and bad debts ratio of several banks reported to the SBV by November 11, 2013: The big bad debts have eaten into banks' profits. VietinBank, which was among the banks with the highest pretax profits in 2012, reported the sharp profit decrease in the first two quarters of the year due to the high provisioning. VietinBank is the bank which had had the highest bad debts by June 30, 2013, about VND7 trillion. However, SHB, with VND5.288 trillion worth of bad debts, is the bank with the highest bad debt ratio, 9.04 percent. The worrying thing is that the fifth-group debts, or irrecoverable debts, amount to 70 percent of the total bad debts, mostly seen in real estate and consumer credit. Finance companies have been found as having the highest bad debt ratio, 44.4 percent. By the end of September, 2013, the total off- balance bad debt ratio of banking systems was over 142.3 trillion VND, account for 4.62% of total bad debt, increase 20% compared with the end of 2012. Banks have been trying