The SBV headquarters in Hanoi (Photo: sbv.gov.vn) Hanoi (VNS/VNA) -Governor of the State Bank of Vietnam (SBV) Le Minh Hung has called oncommercial banks to urgently simplify lending procedures to helpCOVID-19-affected firms easily access preferential interest rate loans.
But he said banks must stillmeet lending standards to ensure the safety and stability of the financial andbanking system.
Banks needed to determine thatsupport for borrowers was their responsibility to the system and the economy,Hung said, emphasising the measures were effective for both the banking systemand borrowers.
Despite appreciating initialefforts made and results, Hung asked banks to drastically put in place supportingmeasures.
He stressed that State-ownedcommercial banks must speed up the process of working with customers to solveproblems.
“Banks must share difficultiesat a maximum for borrowers both during and after the coronavirus pandemic,” Hungsaid.
“They should use revenue gainedfrom reducing input costs to cut lending interest rates for affected firms andincreasing provision for risky loans.”
Besides corporate customers,the Governor also asked banks to consider restructuring debts for individualcustomers.
The SBV’s Credit andCommunications departments must report to him results of the process regularly,he said.
To support businesses duringthe coronavirus pandemic, banks have introduced credit packages worth VNĐ285trillion with low interest rates. However, many businesses claimed they couldnot access them and proposed that banks ease lending rules.
Nghiem Xuan Thanh, Chairman ofVietcombank, said most companies that could not access the package areinefficiently operating their businesses. Banks would not ease lending standardsas they must avoid risks, Thanh noted.
The package does not come fromthe State budget but from commercial banks. Some experts noted that it aims tooffer loans with low interest rates to businesses during the pandemic but willnot rescue inefficient businesses that are unable to pay their debts.
Tran Hoang Ngan, head of theHCM City Economic Development Institute, said "Banks are themselvesbusinesses so they are always afraid of bad debts.
"If banks struggle withbad debts, the situation will worsen, similar to the 2008-09 financialcrisis," he added.
Banks are not the only sourceof aid for businesses. Ngan said to save small- and medium-sized enterprisesthat find it hard to access the stimulus package, the Government should addmore money to the credit guarantee fund.
It is estimated that some 23 percentof outstanding loans belongs to COVID-19 affected corporations and individualcustomers who work in processing, manufacturing, transportation, accommodation,catering, services, education and training industries.
According to Nguyen Quoc Hung, Directorof the SBV’s Credit Department, in the current situation, it is forecast thebad debt ratio of the banking system will increase this year and negativelyaffect the country’s plans to deal with bad debts and recover poor-performingbanks.
As directed by the Governmentand the SBV, banks have so far restructured debts worth 62.83 trillion VND (2.7billion USD) for 166,544 COVID-19 affected customers. The interest rate cut for289,204 existing borrowers is estimated at some 3.53 trillion VND (150.5million USD).
Banks have also agreed newloans with preferential interest rates for 146,571 customers totalling 511.23trillion VND (21.8 billion USD)./.
VNA
