On December 15, 2022, in Hanoi, Vietnam Banks Association (VNBA) organized a Conference to discuss and agree on possible solutions to support businesses to overcome the difficulties, recover and prosper. Mr. Dao Minh Tu, First Deputy Governor of the State Bank of Vietnam (SBV), attended the Conference and delivered a keynote speech.
SBV First Deputy Governor Dao Minh Tu speaks at the Conference.
Speaking at the Conference, SBV First Deputy Governor Dao Minh Tu highly praised VNBA for having promoted its role in creating a common voice, enhancing the cooperation and cohesion in the operations of the banking sector. The SBV Deputy Governor stressed that in light of the current and upcoming challenges, VNBA must further strengthen the connection in the whole system, jointly find and implement possible solutions to support businesses to recover and develop their production and business operations, and overcome the difficulties.
Overview of the Conference.
According to Mr. Nguyen Quoc Hung, VNBA’s Secretary General, in order to stabilize the common mobilization interest rates and to ensure the liquidity safety of the entire banking system, VNBA had organized a meeting with its members, and 100% of them had agreed to apply the mobilization interest rates for all terms not exceeding 9.5% p.a. (including interest rate plus promotions). In addition, all of the credit institutions had also agreed to put efforts into reducing the lending interest rates through cutting down on the business costs to support the businesses. Until now, 16 credit institutions have registered to reduce their lending interest rates, with the reductions by 0.5 to 3.0% p.a. Especially, one bank has pledged to reduce by up to 3.5% p.a.
Mr. Nguyen Quoc Hung, VNBA’s Secretary General, speaks at the Conference.
Having listened to the comments of the representatives of VNBA, the SBV entities and the credit institutions, Deputy Governor Dao Minh Tu shared that, in the context of many difficulties in the domestic and the international markets, which has significantly affected the banking operations, the SBV has consistently directed the commercial banks to pay attention to and create maximum favorable conditions for reducing the mobilization and lending interest rates.
In the coming time, the credit institutions need to seriously implement their commitments and reduce their lending and mobilization interest rates. Other banks which have not yet committed should quickly develop and issue documents expressing their commitments as appealed for by VNBA; and announce publicly their commitments regarding the interest rate cuts.
The commercial banks need to consider the interest rate cuts to support businesses and the economy to be their responsibility; continue to cut down on their operating costs to enable further interest rate reductions; reduce the interest rates without increasing relevant fees; focus the disbursement for priority areas, such as agriculture and rural development, export, production of auxiliary goods, the fields regarded as the growth engine of the economy, etc.
Beside other rating criteria, the banks’ implementation of the interest rate reduction commitments is also one of the important factors for the SBV to determine the credit limits in 2023 for those banks. Deputy Governor Dao Minh Tu emphasized that, the SBV would always monitor closely the market conditions and take necessary measures to support and ensure liquidity for the banks.
Moreover, Deputy Governor also requested the commercial banks to enhance the implementation of the 2% interest rate support program with a total package worth VND 40 trillion in line with Decree No. 31/2022/ND-CP of the Government. The SBV would create maximum favorable conditions in terms of mechanisms and policies for the banks’ operations, while still ensuring the key objectives of the national monetary policy, and the targets set by the Government and the National Assembly.
LK