The Working Group of the Prime Minister (PM) had a meeting with the State Bank of Vietnam (SBV) on the morning of July 18, 2017 to assess the SBV’s implementation of tasks assigned by the Government and the Prime Minister and measures of contributing to ensuring the GDP objective for 2017.
The meeting
Attending the meeting were Mr. Mai Tien Dung, Minister-Chairman of the Government Office – cum- Head of the PM’s Working Group, members of the Working Group and representatives of relevant ministries. On the SBV’s side, the attendants were Governor Le Minh Hung, members of SBV Management Board, representatives from SBV entities, several commercial banks, VAMC and etc.
Speaking at the meeting, the Head of the PM’s Working Group said that the PM assigned the Working Group to inspect ministries and agencies on implementing the objective of achieving GDP at 6.7% for 2017 in the context of facing both advantages and challenges. He said this is a regular inspection as schedule of the Working Group and the SBV was the 28th entity which was inspected by the Working Group.
Six issues are needed to be focused by SBV to implement
The Head of the Working Group stated that PM Nguyen Xuan Phuc required the SBV to focus on six issues to conduct effective measures.
Firstly, credit growth and interest rate reduction: It is an important issue to obtain credit growth rate of 18-20% for the whole year of 2017. At the recent Governmental Conference with locals, PM required to concentrate credit on production and business, infrastructure and supporting enterprises.
Moreover, the Government assigned the SBV to direct commercial banks to try reducing interest rate by 0.5-1 percentage point p.a.
Secondly, NPL resolution: the SBV should formulate measures soon and well implement Resolution on NPL approved by the National Assembly, ensuring the fulfillment of objectives of the Resolution and specifically guiding credit institutions in selling mortgaged assets, NPLs and etc.
Thirdly, the SBV should conduct measures of mobilizing gold and foreign currencies from the public for the socio-economic development.
Fourthly, cross-ownership issue: this issue still exists after the SBV’s issuance of Circular No.36 and it is indispensable to be better controlled.
Fifthly, the SBV should continue facilitating enterprises to get access to bank loans.
Sixthly, the SBV should strengthen safety and information confidentiality for depositors.
The implementation of assigned tasks of the banking sector
Reporting about the implementation of assigned tasks of the banking sector, Deputy Governor Dao Minh Tu stated that the SBV has managed monetary policy and instruments consistently in a flexible manner, thereby promptly supporting liquidity for credit institutions, curbing inflation, supporting for exchange rate stability, minimizing pressure on increasing interest rate. The SBV has conducted measures of stabilizing the common mobilizing rate, reducing lending rate, saving operational costs of commercial banks in order to support enterprises to improve production and business.
The banking sector has effectively implemented credit programs in the direction of extending credit in parallel with safety and quality, ensuring funds to the economy, enhancing capital disbursement. In addition, the SBV required all the entities to strictly implement measures as stipulated in Action Plan of the banking sector, thereby contributing to improving business environment and national competitiveness for 2017, orientations to 2020 in order to implement Resolutions No. 19-2017/NQ-CP and No. 35/NQ-CP.
Exchange rate has been managed effectively by announcing the daily central rate in line with macro-economic developments and the objectives of monetary policy. Currently, the exchange rate is relatively stable as compared to that at the beginning of 2017; the forex market is basically stable, the liquidity is strengthened, all legitimate demand of individuals and organizations is fully and promptly met. The SBV bought a large volume of foreign currencies to increase the state reserves and initially achieved the objective of anti-dollarization. At the same time, the SBV has conducted consistently measures of managing gold market; thereby the gold market continues to be stable, eliminating the goldization.
The SBV concentrated on directing credit institutions to continue resolving NPLs in accordance with approved plans. The SBV completed and submitted to the Political Bureau Scheme on restructuring the system of credit institutions in conjunction with resolving NPLs for 2016-2020 period. The banking sector continues to strictly implement measures of resolving NPLs in order to control NPLs in line with the set objective and improve the capacity of resolving NPLs of VAMC.
In addition, the SBV enhanced the inspection and supervision, ensuring safe and sound operations of credit institutions, supporting the restructuring and NPL resolution; accelerating the handling of violations concerning with share ownership and cross-ownership.
Implementing Scheme on non-cash payment, there are many positive changes in banking services and technology. Many new banking products and services are attracting customers and changing their habits and awareness of cashless payment…
Highly appreciating SBV management
Concluding the meeting, the Head of the PM’s Working Group said for the first six months of 2017, the SBV strictly implemented directives of the Party, the National Assembly and the Government. The SBV has managed monetary policy in a flexible manner. He cited the stable exchange rate, proper credit growth, total liquidity increasing by 6.28%, and capital mobilization increasing by 7.43% in comparison with the same previous period.
For growth objective, the Head of PM’s Working Group commended the SBV’s measure of concentrating capital flow on production and business, start-up and infrastructure. The SBV also made recommendations on the restructuring of credit institution system, NPL resolution and safe and sound banking operations…
Participants also suggested various measures and recommended to tackle with obstacles and difficulties to better accomplish the tasks assigned by the Government and the PM.
Le Hang