In his concluding remarks at the online conference reviewing and evaluating the banking activities in the first 6 months, as well as deploying the tasks for the remaining 6 months of 2019, the Governor of the State Bank of Vietnam (SBV) required the stakeholders in the whole industry to strive to fulfill the tasks of 2019, creating a good ground for 2020 and the subsequent years.
At this conference, Governor Le Minh Hung complimented the SBV units for having drastically implemented Resolution No. 01 of the Government and the SBV instructions; making timely forecasts, plans and scenarios reflecting closely the real situations; operating flexibly and synchronously the monetary, credit and banking policies; creating sufficient room for the fiscal policy and other macro policies to take effect; directly contributing to controlling inflation at a low level, supporting a high growth rate. The activities of the banking industry have received highly positive evaluation by the National Assembly, the Government, domestic and foreign experts as well as the public opinion. The important results achieved by the banking industry in the first 6 months of 2019 are shown on the following aspects:
First, controlling inflation and anchoring inflation expectations at a low level. The average 6-month inflation was relatively stable at 2.64% (it was 3.29% in the same period of 2018), significantly lower than the 4% target set by the National Assembly; The average core inflation in the first 6 months of 2019 increased by 1.87%, proving that the management of the monetary policy over the past time has been going in line with the orientation of controlling inflation;
Second, the monetary policy management has basically helped keep interest rates relatively stable. The lending rates of the credit institutions range between 6-9%/year for short-term loans, and between 9-11%/year for medium and long term loans.
Third, in the context of both advantages and difficulties in the domestic and international markets, the SBV has actively administered the central exchange rate in line with the domestic and foreign market developments, the macro and monetary balances as well as the monetary policy objectives. The situation of foreign exchange market in the first 6 months of the year is relatively stable, the exchange rate has closely followed market conditions; the liquidity has been ensured; all foreign currency transactions have been going on smoothly; the legitimate foreign currency needs have been fully and promptly met.
Fourth, the credit growth has been reasonable with quality and efficiency; with the implementation of many credit management solutions, the credit of the whole industry has been growing well since the beginning of the year; the credit structure has been positively adjusted, with more credit focusing on manufacturing, business, priority areas; Credit for potentially risky areas such as BOT, BT projects and consumer credit have been put under control. Along with that, the banking sector has also actively implemented many synchronous solutions to limit black credit. In addition to continuing to promote solutions to facilitate access to capital that the banking sector has been implementing during the past time, the SBV has also directed credit institutions, especially Vietnam Bank for Agriculture and Rural Development (Agribank), Vietnam Bank for Social Policies (VBSP), to have specific credit packages, focusing on consumer loans in the rural areas; expand and develop effectively the operations of microfinance institutions, etc. to limit the chances of people reaching out for informal financing channels.
Fifth, the restructuring of the system of credit institutions in association with the handling of bad debts has been strongly implemented and achieved positive results, in line with the roadmap and plans, ensuring stability, safety and healthy operations of the credit institutions. The handling of bad debts and collateral assets of bad debts has achieved positive results, the ratio of bad debts has had a downward trend, both for on-the-sheet bad debts, non-performing outstanding loans in VAMC, as well as potential loans to become bad debts.
Six, the payment activities, especially non-cash payments, have continued to have a strong development with the application of various new and modern banking products and utilities; the number and value of transactions have grown strongly. Banks have introduced new and modern technologies into payment operations, promoting modern, safe and convenient forms of payment that are positively received by consumers.
Seventh, the administrative reforms in the whole banking system have continued to achieve positive results; the SBV units have actively implemented the Banking Sector Action Plan to implement the Government Resolutions, making clear changes and clear effects in the administrative reforms, improving the business environment in the banking sector. As a result, the business environment in the monetary and banking sector has continued to be improved positively, making an important contribution to improving the business environment of the country in general. The year 2019 is the fourth consecutive year the SBV has led the ranking index of public administrative reforms (Par Index) among the ministries and government agencies. Vietnam's Credit Access index was also ranked 32/190, third in the region and on par with Singapore and Malaysia - the top countries in the ASEAN 4.
The delegates at the Conference
Specifying the advantages and difficulties in the last months of 2019, Governor Le Minh Hung noted that the SBV functional units should strengthen the advisory work and flexibly, closely follow the regional, international and domestic monetary developments, in order to proactively propose timely solutions. At the same time, the banking system must regularly pay attention to the quality and efficiency of the inspection and supervision work, especially remote monitoring; improving the legal framework, with further reviews for necessary revisions and supplements, especially those provisions related to operating the monetary policy and the banking operations.
In order to accomplish the remaining tasks of 2019, creating a good ground for 2020 and the following years, the SBV Governor stressed that in order to achieve the target of macroeconomic stability, controlling inflation at below 4%, economic growth of 6.8% in the context of the world economy undergoing many complicated and unpredictable changes, the tasks and requirements set for the banking sector in 2019 are still very heavy, the banking sector will focus on implementing the solutions for the remaining 6 months of 2019, focusing on the following:
First, continuing to focus on completing the legal framework, policies on monetary and banking activities. Expeditiously revising and finalizing the Decrees in the fields of banking inspection, supervision, foreign exchange management, payment activities,... in order to create a synchronous legal corridor, meeting the requirements of state management in the banking sector, ensuring the stability and safety of the credit institutions’ operations.
Second, operating the monetary policy in a proactive, flexible and prudent manner, coordinating harmoniously with the fiscal policies and other macroeconomic policies, aiming to control the average inflation under 4% as targeted for 2019; maintaining the macroeconomic stability; supporting economic growth at a reasonable level; stabilizing the money and foreign exchange markets.
Third, continuing to actively implement the scheme of restructuring the credit institution system in association with dealing with bad debts by 2020, focusing on handling effectively with weak credit institutions; conducting a preliminary review of 02 years’ implementation of Resolution 42; strengthening, consolidating and reorganizing the People’s credit fund system to ensure operations in line with the principles and objectives, and maintaining the local socio-economic stability; enhancing the inspection, supervision, governance and strict control of the operations of the credit institutions; focusing on implementing the non-cash payment promotion project, gradually reducing the ratio of cash payments in the economy; facilitating conditions to deploy new and modern payment products and services; monitoring the payment systems, ensuring safe and efficient operation; enhancing the security and safety in electronic payments; applying security and payment standards according to the international standards; improving the legal framework to better manage the services of the payment intermediaries and electronic payment service providers.
Fourth, promoting the administrative procedure reform in the banking activities to cut down the costs of administrative procedures, enabling organizations and individuals to conduct administrative transactions with the SBV and the credit institutions, contributing to improve the business environment in the monetary and banking sector, improving the national competitiveness, promoting businesses in general and the credit institutions in particular to develop sustainably.
SBV Governor Le Minh Hung believed that, with the spirit of solidarity and determination of all officials, civil servants and employees in the whole industry, the banking sector will successfully accomplish the tasks of 2019 entrusted by the Party, the State and the people.
VA