Promoting further cooperation between SBV and Banking Working Group

Also attending the meeting were representatives of the SBV units: the International Cooperation Department, the Legal Department, the Payment Department, the Monetary Policy Department, the SBV Office and the Banking Supervision Agency, as well as representatives of some BWG’s members...

Speaking at the meeting, Mr. Tim M Evans expressed his thanks to the Government and the people of Vietnam for creating conditions for him to have a safe living environment throughout the Covid -19 pandemic. He had witnessed the Government’s effective handling with the disease prevention and felt honored to be a companion with the Vietnamese people during this time.

According to Mr. Tim M Evans, the SBV has made clear and consistent instructions in ensuring the operations of the financial system, supporting and promoting the country's economic development. He thanked the SBV for its support in cooperating with the BWG. The HSBC has recently assumed the Head of the BWG since March 2020. Throughout the course of 2019, there were a lot of discussions going on between the two sides, and the SBV has actively supported by settling the issues raised in those discussions. On this occasion, Mr. Tim M Evans also thanked the representatives of the relevant departments, agencies and units of the SBV, especially the International Cooperation Department, for having coordinated the cooperation with the BWG and organized effective stakeholders’ discussions.

“Among the achievements that we made in 2019, we can mention Decree 87, Circular 20 on the prevention of money laundering and terrorism financing, or Circular 23 on electronic signage, throughout the Covid-19 pandemic, we have realized that there are many customers wanting to do remote transactions with the banks. Therefore, the amendments to those Circulars were very important and positive,” Mr. Tim M Evans emphasized.

According to Mr. Tim M Evans, there are several other substances that the BWG would like to further promote in 2020, such as: Electronic signage, Circular 18 on ensuring information security for banking transactions, etc. In addition, Mr. Tim M Evans also discussed some specific issues of the HSBC.

The BWG Chairman also commented that Circular 01/2020/TT-NHNN issued in early 2020 was a highly supportive legal document for the banks and businesses, reflecting the timely response of the banking system in order to support the economy.

Overview of the meeting

Thanking the Chairman of the BWG for his good words about the achievements in the fight against the coronavirus of the Government of Vietnam, Deputy Governor Nguyen Thi Hong shared that in the past, many foreign investors, including foreign banks, put their confidence in Vietnam because of the increasingly stable macroeconomic environment. A favorable business environment and a stable political foundation have always received high attention from the Government, the ministries and agencies. Vietnam already has a good environment, and through the recent efforts in preventing the coronavirus, Vietnam has been recognized as a bright spot. Although Vietnam's economy has been significantly affected, the economic growth has still been maintained. Meanwhile, many countries have experienced low growths, even negative growths. That shows a fact that Vietnam has achieved such results thanks to the strong determination and great efforts of the entire political system.

“The SBV is considered by the leaders of Vietnam as one of the earliest government agencies to implement the fastest, most practical and effective solutions. Until now, the results achieved have shown the effectiveness of the banking industry's efforts. Meanwhile, the management of the monetary policy and the banking operations have still ensured the stability, contributing to the macroeconomic stability and safety of the banking system”, the SBV Deputy Governor emphasized.

Regarding the cooperation between the SBV and the BWG, the Deputy Governor affirmed that the SBV has established a close and efficient relationship with the BWG. Rarely does a ministry or agency operate such a regular and effective cooperation mechanism; which is reflected in three points.

The SBV and the BWG have maintained a regular exchange channel; every 3 months or 6 months, the SBV meets with the BWG to evaluate the macro-economic issues and propose the best practices. One of the substances the banks are very interested in is the legal frameworks and documents issued by the SBV, and how they are actually implemented, the positive aspects and the obstacles that need to be discussed and feed-backed from the domestic financial institutions to the policy-making agencies.

According to the Deputy Governor, for any questions raised by the banks, the SBV always try to explain very thoroughly to the banks. For the recommendations that the SBV deems appropriate; based on the practical situations, it is necessary to make amendment and revision to some legal document, the SBV is also ready to revise and improve the legal document system.

The second aspect of cooperation is that the SBV often engages with the foreign banks in order to gain experiences. The SBV realize that within the BWG, there are several banks with lots of years of experience, having been operating in many fields, even in areas where Vietnam has not yet developed such as the derivative market; the SBV would really like to learn from their experience through such exchange mechanisms as joint conferences, seminars, workshops, or sending officials overseas for practice or to pursue study, etc.

Thirdly, the SBV Board of Management always has high evaluation for the role, the contributions and the coordination of the BWG. Generally speaking, all foreign banks operating in Vietnam have good records of compliance and high cooperation.

Regarding Circular 01, the Deputy Governor added that the SBV had quickly and timely issued this Circular in March, immediately after the Covid-19 outbreaks. In particular, the solutions that the SBV has put in place are very practical and close to the needs of the people and the businesses. The issuance of Circular 01 came at an early stage at the time when the global coronavirus situation had not become complicated, and now it has. Although Vietnam has managed to control effectively the disease domestically, many businesses with connection to the international trade and investment transactions will certainly be badly affected. Therefore, for the promulgation of Circular 01 at such an early stage, the SBV is considering a possible review. Recently, the SBV Governor has requested to organize several Bank-Business Connection Conferences in the provinces in order to listen to the opinions from the businesses and the people. On that basis, the SBV will consolidate, evaluate and analyze, and, in case of necessity, make adjustments in accordance with the reality. The SBV has also called on the credit institutions to provide maximum support to the businesses and the people, so that when they recover, and they will become loyal customers of the banks. However, the credit institutions still have to ensure their operational safety, and cannot lower their lending standards nor break the safety ratios in the credit operations, with a view to maintaining stable operations of the credit institutions...

In addition to Circular 01, the SBV has also implemented other measures such as reducing the service fees, cutting down the key interest rates twice, keeping a close eye on the inflation, monitoring against the overall targets, taking measures to maintain the monetary policy, controlling the inflation, and ensuring the macroeconomic security.

The Deputy Governor expressed hopes that the BWG would continue to work closely with the SBV to share the market information and international experience on the substances and issues of interest to both sides, such as payment, inspection and supervision, Fintech, digital finance, exchange rates, etc., new products in the banking sector that are not yet available in Vietnam such as cash flow management (the BWG can support, in particular providing the experience of China, and possibly some other countries with similar conditions as Vietnam).

Thanking the Deputy Governor Nguyen Thi Hong for having shared useful information, Mr. Tim M Evans stated that his colleagues in Hong Kong and the UK often asked him about Vietnam’s experience, how Vietnam could do such a good job in tackling the coronavirus. And the key message is fast and decisive actions. These are two things Vietnam was able to do, and thereby creating a more positive image of Vietnam.

On this occasion, the Deputy Governor Nguyen Thi Hong also wished Mr. Tim M Evans a lot of success in his new position.

VA