Hanoi (VNA) - As Vietnam approaches a new milestone on its development journey, the banking sector continues to play an indispensable role, acting as the financial backbone fuelling the nation’s growth, according to Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.
Tu highlighted how the banking sector has transformed significantly over the past eight decades, especially in terms of monetary policy formulation and implementation, adopting modern tools aligned with best international practices.
In a developing economy like Vietnam, where banks are the main capital providers, monetary policy is an essential instrument for the Government to promote sustainable and robust economic growth. The SBV has prioritised inflation control and macro-economic stability - key factors in creating a conducive environment for investors, supporting businesses, attracting foreign investment, and optimising resource allocation, he said.
Despite global uncertainty and pandemic-induced risks that have led to downgrades in many countries, Vietnam has seen upgrades in its sovereign credit rating, reflecting stable economic fundamentals and promising growth outlook.
During the nation’s divided and war-torn period, the State Bank took on critical responsibilities that extended beyond routine banking. Following the 1954 Geneva Agreement, Vietnam’s banking system in the North focused on supporting socialist construction, while covertly supporting the southern revolutionary efforts.
(Photo: VietnamPlus)
The banking sector acted as a financial lifeline, channelling resources for infrastructure development in the North and providing essential foreign currency and financial aid to the South’s battlefront during the struggle for liberation. Banking policies facilitated capital mobilisation, credit allocation, and liquidity support was tailored to wartime conditions, sustaining agriculture, industry, and cooperative sectors vital for economic stability and growth.
Remarkably, despite operating under extreme conditions, “banking soldiers” in the South ensured the secure and covert transfer of funds from 1959 until reunification in 1975. Their unheralded work maintained uninterrupted financial flows and public confidence, contributing to the ultimate victory and the nation’s reunification.
This era saw the banking sector evolve from basic wartime support to laying the foundation for Vietnam’s monetary independence and economic sovereignty, transitioning towards a socialist financial system and stabilising the national currency.
Looking ahead to 2045 - a centennial landmark of national independence and a new era of prosperity— the bank is committed to aligning closely with the Party’s leaders and collaborating with Government agencies to drive the country’s development agenda.
Reforming institutional frameworks and legal policies is part of the plan to enhance governance efficiency, ensuring credit institution safety and quality while aligning with market economy principles and international integration mandates set out in Resolutions 66-NQ/TW on comprehensive reform in law building and enforcement and 59-NQ/TW on intensive and extensive international integration.
SBV would vigilantly monitor domestic and global economic trends to advise the Government on timely, flexible monetary policies that coordinate with fiscal strategies to control inflation, stabilise the economy, and support ambitious growth targets.
The central bank will guide credit growth in accordance with macroeconomic conditions to stimulate production and priority sectors, while managing credit risk prudently. Expanding banking access to citizens and enterprises—particularly SMEs, startups, and digital innovators—to promote inclusive finance.
Investing in modern IT infrastructure and payment systems will leverage Industry 4.0 technologies, promote cashless payments in key public services, particularly in healthcare and education, and strengthen cybersecurity measures to protect customers and maintain trust, he said.
The SBV will also serve to enhance the operational quality of credit institutions through strict regulatory compliance, risk management, and aggressive bad debt resolution. This aligns with efforts to bolster competitiveness and private sector development as outlined in the Politburo’s Resolution 68-NQ/TW, stated the SBV Deputy Governor./.
