Between May 21 through 29, 2020, the State Bank of Vietnam (SBV) organized a series of Bank-Enterprise Connection Conferences in the provinces of Binh Duong, An Giang, Hai Phong, Thai Nguyen, Vinh Phuc, Yen Bai and Ho Chi Minh City, with the Chairmanship of SBV Deputy Governors Dao MinhTu, Nguyen Thi Hong and Doan Thai Son individually, in order to enhance the implementation of various measures to remove the difficulties for the Covid-19 affected businesses. Also attending the Conferences were the leaders of the local authorities, the relevant departments and agencies; representatives of the SBV departments and branches, the associations, commercial banks and businesses in those provinces.
The banking sector proactively gets involved and promptly removes difficulties for the Covid-19 affected businesses
Speaking at the Conferences, the SBV Deputy Governors stated that the complicated developments of the Covid-19 pandemic have affected all aspects of the socio-economic life. Right after the onset of the coronavirus outbreaks, the banking sector proactively monitored closely, made projections and conducted urgent measures in order to remove the difficulties for the production and business operations, supporting the businesses and the people. Accordingly, the SBV has promptly issued Circular No. 01/2020/TT-NHNN (Circular 01) and Directive No. 02/CT-NHNN (Directive 02) in early March, 2020 directing the credit institutions to conduct debt rescheduling for due loans (principal and interest), waive and reduce the interest and fees, continue to provide new loans for those businesses in need of finance to maintain and recover their operations to overcome the impacts of the pandemic.
Deputy Governor Dao Minh Tu chairs the Conference in Ho Chi Minh City
Moreover, the SBV has also directed the credit institutions to develop strongly their online payment services, in order to enhance non-cash payments and facilitate the people’s living expenditures in time of social distancing; waive and reduce payment fees in order to support the people and businesses on a large scale (over VND 1 trillion). The SBV has proactively proposed to the Government to provide refinancing loans amounting up to VND 16 trillion with zero interest through the Vietnam Bank for Social Policies (VBSP) to assist the businesses to pay salaries and wages to their employees and workers, whose jobs have been suspended due to the coronavirus outbreaks.
Deputy Nguyen Thi Hong speaks at the Conference in Thai Nguyen province
With the drastic implementation of Circular 01 and Directive 02 by the SBV, after two months, all of the credit institutions, including the finance companies and the foreign banks, have been robustly involved; the whole banking sector has rescheduled debt payments for over 215,000 borrowers with the loan outstanding of VND 138 trillion; waived and reduced the interest for over 320,000 borrowers with the loan outstanding of over VND 1,130 trillion; provided new loans with preferential interest (0.5-2.5% lower than that before the outbreaks) with the accumulated amount since January 23, 2020 of VND 659 trillion for 188,000 borrowers. The VBSP has extended debt payment for nearly 143,000 borrowers with the loan outstanding of over VND 3.6 trillion; adjusted loan maturities for over 75,000 borrowers with the loan outstanding of nearly VND 1.6 trillion; provided new loans to over 519,000 borrowers with the loan outstanding of over VND 21 trillion.
Continuing to listen to mechanism/policy recommendations
At the Conferences, the representatives from the businesses mentioned various issues and obstacles in accessing bank loans and proposed a number of solutions to the SBV and the relevant ministries/agencies in order to create more favorable conditions to access bank loans for the production and business operations in the coming time.
Some representatives from the businesses speak at the Conference in Vinh Phuc
In addition, some participants also commented on the obstacles related to the process of proving their losses caused by the pandemic, as well as the classification of businesses in order to get proper and timely support. Having taken note of those recommendations, the representatives of several big commercial banks in those provinces provided feedback and directly resolved several issues encountered by the businesses in accessing preferential loan packages or applying for loan extension or interest rate reduction, etc.
Several representatives from the banks and the businesses also made comments and suggestions on removing the difficulties for the businesses and enhancing the links between banks and enterprises.
Synchronous support packages
In order to promptly and effectively implement the banking sector’s measures to remove the difficulties for the economy, the SBV Deputy Governors requested the SBV's departments in the coming period to focus on accomplishing the following tasks: (i) Reviewing and advising the SBV Management Board to amend, supplement or submit to the competent authorities for amendments and supplementations of the mechanisms, policies and laws on the banking operations, which are currently causing issues and obstacles for the production and business operations; creating favorable conditions for the credit institutions to operate in accordance with the practical situations; facilitating for the people, businesses to promptly respond and mitigate the impacts of the Covid-19 pandemic; (ii) Promoting the implementation of the solutions to enhance non-cash payments, programs on waiving and reducing the electronic payment service fees; (iii) Urgently coordinating with the ministries, agencies and local authorities to implement the SBV’s tasks as assigned in the Government's Resolution No.42 dated April 9, 2020 on measures of supporting the people affected by the Covid-19 pandemic; (iv) Proactively balancing capital to invest in projects of high performance and supporting recovery right after the end of the pandemic.
Deputy Governor Doan Thai Son speaks at the Conference in Vinh Phuc province
The SBV also requested that the commercial banks’ branches and transaction offices be more closely in conducting the measures to remove the difficulties for their customers; promptly report to the SBV about the difficulties, obstacles and propose recommendations related to the mechanisms and policies of the banking industry in the implementation process of the credit institutions.
The SBV Departments were also requested to further support and actively follow the demands of the businesses in each of the provinces; advise the SBV Management Board of possible appropriate solutions and policies to remove the difficulties for the businesses; create favorable conditions for the credit institutions to operate in accordance with the practical situations; and facilitate for the people and businesses to mitigate the impacts of the Covid-19 pandemic while still ensuring safe and sound banking operations.
Le Hang