On July 5, 2019, the State Bank of Vietnam (SBV) organized a video conference to review the banking performance in the first six months, and deploy the tasks for the remaining 6 months of 2019.
Attending the conference were members of the SBV Board of Management, representatives of the Vietnam Banking Trade Union, the SBV Trade Union, the SBV Youth Union, the Board of Management of the Banking Supervision Agency, the leaders of the SBV Departments and entities, the Directors of the SBV municipal and provincial branches, etc.
According to the reports delivered at the conference, in the first six months of 2019, following the macro-economic and monetary developments, the SBV managed the monetary policies in an active, flexible and prudent manner in coordination with the fiscal policies and other macro-economic policies to control the inflation within the targeted level, support economic growth, stabilize the money and forex markets, thereby contributing greatly to stabilizing the macro economy, controlling the inflation, and facilitating enterprises to develop their business and production operations.
In the first six months of 2019, the SBV maintained the key interest rates and instructed credit institutions to review and make financial balances for the application of suitable lending rates on the basis of the mobilizing rates and the levels of risks, as well as to ensure the financial safety. As a result, the common interest rates in the first six months basically remained stable. The current lending rates of the credit institutions range from 6-9% p.a for short-term loans and 9-11% p.a for medium and long term loans.
In the context of both advantages and disadvantages in the international and domestic markets, the SBV has been administering the central rate in an active and flexible manner in line with the market developments, the macro and monetary balances, and the monetary policy objectives. The forex market in the first six months was relatively stable, the exchange rate fluctuated in accordance with the market conditions, while the liquidity was ensured, transactions in foreign currencies were done smoothly, the legitimate demands for foreign currencies were met fully and promptly.
Implementing the Prime Minister’s directions on limiting black credit, the SBV has required credit institutions to strengthen the implementation of measures of removing difficulties and facilitating institutions and individuals to get access to bank loans; conduct solutions to meet the legitimate demands of the people, thereby contributing to limiting black credit.
Recently, the SBV Governor issued Decision No. 1178/QD-NHNN promulgating the Action Plan for the implementation of Directive No. 12/CT-TTg dated April 25, 2019 of the Prime Minister on enhancing the deterrence and the fight against crimes and violations related to “black credit” activities. Accordingly, the SBV Governor has assigned the SBV entities to take lead in coordinating with the relevant ministries and agencies to contribute to limiting black credit.
The participants speak at the conference
The restructuring plan of the credit institutions has continued to be strengthened. The restructuring has created stability and safety for the credit institution system. Particularly, the financial capabilities of the credit institutions have been consolidated, their charter capital has increased gradually year by year; the quality of governance and management of the credit institutions has been improved steadily in accordance with the international practices; the transparency of the banking operations have been greatly improved.
Between 2012 to end of June 2019, the whole banking system resolved in total VND 937.5 trillion of NPLs. In 2018, the system of credit institutions resolved VND 163.14 trillion of bad debts, the ratio of bad debts on the balance sheets by end of June 2019 was 1.91%.
In the payment area, beside improving the legal framework and policies on payments, the SBV has implemented synchronously the methods to accelerate non-cash payments, and directed the credit institutions to develop their payment infrastructure, ensuring safety, security of the transactions via banks and ensuring the interests of the customers; applying the achievements of the Industry 4.0 in the banks’ payment services. As a result, the non-cash payment has continued to obtain positive changes. The commercial banks have applied new and modern technologies to payment activities, enhanced modern and safe payment methods, which have been well received by the customers. Non-cash payments in the public sector have been constantly enhanced and expanded.
The SBV has also promoted the communication, knowledge sharing and information dissemination on non-cash payments; actively built up the content and coordinated with the media to conduct the financial education programs, which have received high evaluation from the public, such as "Smart money", "Smart-kids", the contest "Correct understanding about money" , "Wise money" ... in order to raise the public awareness and knowledge, thereby improving the accessibility to banking products for the people, encouraging the use of non-cash payment methods.
Speaking at the conference, the participants reviewed and evaluated the banking activities in the first 6 months, as well as recommended measures for deploying the tasks for the remaining 6 months of 2019, focusing on the following fields: credit extension for production, business and consumption, contributing to limiting black credit, controlling credit for risky fields; enhancement of non-cash payments in the economy, development of new and modern payment services; implementation of the restructuring in association with resolving NPLs at the credit institutions; organization of bank-enterprise connection programs in order to facilitate enterprises to get access to bank loans; implementation of measures of simplifying the administrative procedures, reducing banks’ operational costs, etc.
Le Hang