On January 27, 2021, in the discussion session at the XIII National Party Congress, Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) made a discussion note on the contributions of the banking system to the successful implementation of the Resolution of the XII National Party Congress, and the key tasks of the banking industry in the coming time.
Governor Nguyen Thi Hong makes a discussion note at the National Party Congress
Conducting relevant measures and instruments in a proactive, prudent and flexible manner
Opening her speech, on behalf of the SBV's Party Committee, Governor Nguyen Thi Hong expressed high consensus with the documents presented at the Congress.
In her speech, Governor Nguyen Thi Hong emphasized that, in the past five years, the world economy had experienced complicated and unpredictable fluctuations, the COVID-19 widespread outbreaks had impacted broadly and seriously all aspects of the socio-economic life, posing many unprecedented challenges for the monetary policy management and the banking operations. In that context, the SBV has always been consistent with the objectives of controlling the inflation, maintaining the macro-economic stability, supporting the economic growth, ensuring prudent and safe banking operations; following closely the market developments; conducting relevant measures and instruments in a proactive, prudent and flexible manner. Thereby, the banking sector had made multiple achievements, specifically as follows:
First, as a central bank, the SBV has managed and contributed to controlling the average inflation below 4% in accordance with the target set by the National Assembly; the money and forex markets have basically been stable; the State foreign exchange reserves have achieved a record high, a 3-time increase as compared to that of the end of 2015; the situation of dollarization has declined gradually; and the confidence in the Vietnamese Dong has been rising steadily. The policy of anti-dollarization in the economy has been effectively implemented; the capital sources in foreign currencies and gold have gradually been transformed into money, supporting the socio-economic development. In the face of the serious impacts of the COVID-19 pandemic, the SBV had taken actions at an early stage and issued multiple practical and timely measures to assist the enterprises and the people, contributing to making Vietnam one of the few economies with positive growths in 2020. The above elements have contributed significantly to strengthening the investors' confidence, contributing to improving Vietnam's national credit ratings.
Second, with the role of a capital mover in the economy, the SBV has managed the credit policy with the key policy of credit expansion coupled with maintaining the safety and efficiency of the system, ensuring adequate capital supply for the economy, and being in line with the target of controlling the inflation; the credit management in association with the transformation of the economic growth model towards improving the quality and efficiency in line with the policy of gradually reducing the ratio of capital supply for development investment from the bank credit channel. The credit structure has shifted positively, focusing mainly on production and business, especially the priority fields and sectors such as agriculture, rural development, the policy beneficiaries, poverty reduction efforts; the credit has been increasingly directed to the private sector, which is an important driving force of the economy.
Third, as a service provider to the economy, the SBV has made significant progress in the payment services in the recent years in terms of both quality and quantity with many new and modern payment products, services and utilities based on the information technology; non-cash payments have been promoted strongly; the digital transformation and digital services have been growing strongly. The security and safety of the payment system have been enhanced, ensuring the convenient and effective service provision for the businesses and the people.
Fourth, as the bloodline of the economy, the SBV has implemented effectively the restructuring of the system of credit institutions in association with NPL resolution; the scale, financial capacity, governance and management quality of the credit institutions have all been gradually improved, catching up with the international practices. The issue of cross-investments and cross-ownership have been attended to and addressed; the situation of manipulations of the banking operations by large shareholders/groups of shareholders has been gradually controlled. The measures of resolving bad debts have been implemented synchronously in accordance with Resolution 42 of the National Assembly, together with measures of controlling and preventing newly arising bad debts. The inspection and supervision, the prevention and combat against money laundering and terrorism financing have achieved many important results, contributing to improving the transparency in the economy, ensuring safe and sound banking operations and national financial and monetary security.
Fifth, in all aspects of banking operations, the administrative reform and legal framework improvement have received a lot of attention. Over the past 5 years, the SBV has continuously achieved the first rank out of the central Government ministries and agencies in the survey for the Public Administration Reform (PAR) Index.
Key tasks of the banking industry in the coming time
According to Governor Nguyen Thi Hong, for the term of 2021 - 2025, it is expected that the world situation would continue to develop complicatedly and unpredictably, posing many challenges for the economy in general and the banking operations in particular. With the spirit of solidarity in the whole banking system, the SBV Party Committee is determined to overcome all difficulties and challenges to lead and direct the banking system, focusing on the following areas :
First, continuing to be consistent in controlling the inflation, maintaining the macroeconomic stability, improving the quality of the monetary policy making and the administration in association with other macro-economic policies to increase the resilience of the economy to changes in the world economy, the independence and autonomy of the economy in the process of international economic integration.
Second, continuing to implement measures to remove difficulties for the businesses and the people; supporting the post-COVID economic recovery; focusing capital on production and business, especially priority areas; strictly controlling credit for areas with potential risks. Encouraging the development of credit products to meet the legitimate needs of the people, contributing to limiting "black credit"; Paying attention to the development of "green credit", "green banking" products, promoting financial inclusion, generating jobs, and ensuring social security.
Third, promoting innovations and application of the IR4.0 achievements in payment activities; introducing payment services in the rural, remote areas in association with the implementation of the National Financial Inclusion Strategy; promoting the electronic payments in the Government sector and for public services. Enhancing the information dissemination, communication, guidance and consumer protection in non-cash payments; Promoting the innovation and creativity in banking operations. Effectively implementing the National Financial Inclusion Strategy, contributing to the goal of leaving no-one behind.
Fourth, enhancing the inspection and supervision of the credit institution operations; advising the competent authorities to issue and implement the Scheme on restructuring the credit institution system in association with NPL resolution in the period of 2021-2025. Effectively implementing the Banking Development Strategy to 2025, with Vision to 2030.
Fifth, continuing to promote the administrative reform and improving the legal framework on monetary and banking operations; closely coordinating with the relevant ministries and agencies to implement various measures to improve Vietnam's Access to Credit Index; improving the business environment and enhancing the national competitiveness.
Le Hang