Hanoi (VNA) – Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu has said the central bank will strengthen credit growth supervision, ensure policy supports businesses, while guaranteeing credit safety and quality for commercial banks.
The SBV also requires commercial banks to publicly disclose average lending interest rates right from the first months of the year, Tu said in an interview granted to the Vietnam News Agency.
Reporter: How is the atmosphere at the beginning of the year in the entire banking industry going?
Deputy Governor Dao Minh Tu: Right from the first days of the Year of the Dragon, the State Bank's focus is to promote credit growth, and this is also a message throughout 2024.
Accordingly, issues related to mechanisms, policies, and the process of organising and implementing credit have been put forth for discussion, aiming to create conditions to support people and businesses, contributing to promoting economic growth in 2024.
This year, the State Bank of Vietnam will continue to reform mechanisms for managing credit activities and allocating credit quota. It will also created favourable conditions for commercial banks to play an active and proactive role in supplying capital for the economy. At the same time, the State Bank will continue with policies applied since the COVID-19 pandemic.
The policy of postponing due debt and interest payments for business is an example. The State Bank of Vietnam will continue extending this policy to an appropriate time. And of course during the prolonged process, the central bank will also strengthen supervision to ensure policies are implemented for the right subjects and support businesses to overcome difficulties while guaranteeing credit safety and quality for commercial banks.
The SBV's consistent view is to expand credit to support businesses and the economy. When macroeconomic conditions allow, commercial banks are healthy and stable, and capital flows are well directed, the State Bank of Vietnam is ready to increase credit limits for banks.
Although not tightened, lending should not be done at all costs but should be in harmony to ensure the above two factors. This requires dynamism, determination, research and sharing from the banks. This year, the central bank will strengthen strict supervision over credit growth through the banking supervision and inspection agency to ensure credit is directed to priority areas, promote support for those businesses which are in difficulty but have conditions for recovery.
Reporter: Which key areas will the State Bank of Vietnam direct credit institutions to focus on lending in 2024?
Deputy Governor Dao Minh Tu: In the coming time, the State Bank of Vietnam will continue to direct commercial banks to focus capital on key areas, those that need the Government’s incentives as well as those are economic growth drivers, for example, projects in infrastructure investment, electricity and transportation. Besides the four state-owned joint stock commercial banks, private joint stock commercial banks are also interested in those areas.
The State Bank of Vietnam will direct credit to priority areas, promote support for businesses in difficulty but having conditions for recovery. (Photo: VietnamPlus)
Along with that, preferential credit packages will be promoted, such as the 120-trillion-VND (4.87 billion USD) package for social housing, housing for workers and renovation and repair of old apartment buildings. This is a major policy that the Government and the Prime Minister assigned to the banking sector and other sectors, especially the Ministry of Construction and authorised agencies.
In the coming time, the State Bank of Vietnam will coordinate with relevant ministries and sectors to remove current legal hindrances that faces the credit package, while the capital source is ready for disbursement. This is a long-term credit package, and not every project will be approved for borrowing from it. Capital disbursement will be made following the progress of each project as well as financial capacity and borrowing needs of investors.
Another credit package is the 15-trillion-VND package for the forestry and fisheries sectors, which has been fully disbursed in less than a year. The State Bank of Vietnam will direct participating commercial banks to continue adding another 15 trillion VND in preferential loans for the production, processing and export of forestry and aquatic products.
In addition, consumer credit will also be a field that is facilitated and promoted, because boosting consumer credit will increase consumption capacity, leading to demand for production.
The State Bank of Vietnam will consider, research and make adjustments to mechanisms and policies to create conditions for financial companies licensed by the State and commercial banks to participate in the consumer lending sector. Through this, it will contribute to limiting black credit.
Some other areas such as credit for small- and medium-sized enterprises and cooperatives will continue to receive due attention, although difficulties and problems in these areas could not be solved by only the central bank, instead requiring the synchronous participation of many ministries, sectors and even localities.
Reporter: According to Official Dispatch No. 527, the Prime Minister requests the State Bank of Vietnam to direct credit institutions to consider the public announcement of average lending interest rates. However, many banks are said to simultaneously respond negatively to this request. So what is your point of view on this issue?
Deputy Governor Dao Minh Tu: February 23 is the deadline for commercial banks to report to the State Bank of Vietnam on the announcement of average lending interest rates, and differences between average deposit and lending interest rates. The central bank does not restrict credit institutions to announce detailed lending interest rates for customer groups, and customer classification. Commercial banks can decide by themselves regarding this issue.
Banks can report in details their difficulties and obstacles and propose solutions to best implement the Government's direction on publicising lending interest rate-related information. The State Bank of Vietnam will sum up and have appropriate solutions.
Implementing the Prime Minister's direction on announcing average lending interest rates and deposits is the responsibility of the entire banking system. This is to create a transparent and competitive environment among banks. In the 2022-2023 period, there were banks that offered loans at very high interest rates, and cited various reasons for the high rates.
In my opinion, there is no problem with announcing the average lending interest rate. This is the average rate, not the rate for each individual, each business, and customer.
In the immediate future, the State Bank of Vietnam still has no sanction if banks do not comply, but public opinion will monitor the publication of lending interest rates.
Reporter: Thank you very much!
