On September 28, 2024, in Da Nang City, the State Bank of Vietnam (SBV) held a Conference on the banking inspection and supervision in 2024 under the chairmanship of Deputy Governor Pham Quang Dzung. Also attending the Conference, there were leaders of the SBV departments, the Banking Supervision Agency; the SBV branches in 63 provinces and cities.
Deputy Governor Pham Quang Dzung speaks at the Conference
On this occasion, a Seminar on the state of the banking inspection and supervision was also held within the framework of the “Vietnam: Strengthening Banking Sector Soundness and Development” Project (BSSD Project) funded by the Swiss State Secretariat for Economic Affairs (SECO).
Reporting on the banking inspection and supervision of the entire banking industry in 2023 and for 9 months of 2024, Mr. Lai Huu Phuoc, Deputy Chief Inspector in charge of the Banking Supervision Agency under the SBV, said that the banking inspection had continued to be innovated in the direction of strengthening specialized inspections, aiming to focus on subjects and fields with high potential risks, contributing to maintaining the disciplines in the monetary and banking operations. Beside that, the application of the information technology to the banking supervision had also been enhanced to ensure more timely supervision of the operational situations of the credit institutions, improving the effectiveness of the early detection and the risk warnings.
Mr. Lai Huu Phuoc, Deputy Chief Inspector in charge of the Banking Supervision Agency
Mr. Phuoc also pointed out the difficulties in the banking supervision and inspection, such as the increasingly large scale of the credit institutions, the increasingly complicated and diversified banking operations, the heavier workloads to be handled, the limited number of supervision and inspection staff, the incomplete information and data systems in support of the banking supervision, the increasingly complicated situation of cyber crimes and hi-tech crimes in banking activities, etc.
Regarding the things that need more attraction in the operations of the credit institutions through the banking supervision and inspection, Deputy Chief Inspector Nguyen Duc Long mentioned that NPLs of the credit institutions were on an increasing trend; the credit operations of several credit institutions have not yet focused on production, business or priority fields; the implementation progress of the restructuring plans of several credit institutions had been slow…
Participants at the Conference
Speaking at the Conference, Deputy Governor Pham Quang Dzung acknowledged the efforts of the Banking Supervision Agency and the Banking Supervision Divisions of the SBV municipal and provincial branches over the past time. The SBV Deputy Governor requested the Banking Supervision Agency, right after this Conference, to urgently respond to the issues that the SBV branches have proposed and recommended.
According to the SBV Deputy Governor, although the credit growth rate in recent months has been more positive than the same period in 2023, the credit quality has tended to decrease and NPLs have been at risk of increasing... The main reasons had been the impacts of the economic recession and the damage caused by the natural disasters in many provinces. In addition, the capital absorption by the businesses has not been improved, and the real estate market has still been facing difficulties. Therefore, the SBV Deputy Governor emphasized that the Banking Supervision Agency and SBV branches need to pay attention to the credit granting to customers and customer groups related to major shareholders; the credit granting to areas with potential risks (including real estate, consumption, securities) ...
In the coming time, the SBV Deputy Governor requested the SBV entities to continue to effectively implement the 2024 Inspection Plan, ensuring the progress of each inspection team in compliance with the provisions of law; promptly develop the 2025 Inspection Plan; strengthen the supervision of the activities of the Inspection Teams; improve the quality of the recommendations in the inspection conclusions; promptly and specifically recommend possible amendments and supplementations to any inappropriate mechanisms or policies; enhance the monitoring, inspection and post-inspection actions,... and particularly, continue to strengthen and improve the quality of the banking supervision; focus on supervising the credit quality and credit granting to the right subjects and areas,... ; strengthen the close supervision of the operations of poor-performing credit institutions with many existing problems in their operations.
Moreover, the SBV Deputy Governor also requested the SBV entities to continue to implement effectively the tasks as stated in Scheme 689 and the Action Plan of the banking sector; closely monitor and direct the credit institutions to strictly and effectively implement the approved plans of restructuring in association with NPL resolution; accelerate the NPL resolution,
The SBV Deputy Governor went on to requested the relevant entities to continue reviewing and improving the regulations for safe and sound banking operations, good governance, risk management, in line with the international practices and the practical situation of each credit institution; review and recommend to improve the legal documents on the procedures for the banking inspection and supervision; continue to develop the human resources for banking inspection and supervision, etc.
Le Hang