On June 29-30, 2020, the State Bank of Vietnam (SBV), in coordination with the Provincial People’s Committees (PPCs) of Dak Lak and Khanh Hoa, organized Bank-Enterprise Connection Conferences in those respective provinces, which aimed at enhancing support to the Covid-19 affected businesses. The Conferences were under the co-chairmanship of SBV Deputy Governor Nguyen Thi Hong and the Vice Chairpersons of the two PPCs.
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 operating in those provinces.
According to Deputy Governor Nguyen Thi Hong, the SBV has conducted a series of measures right after the onset of the coronavirus outbreaks, which was reflected through the issuance of several guiding documents such as Circular No. 01/2020/TT-NHNN (Circular 01) and Directive No. 02/CT-NHNN (Directive 02) in early March, 2020. The banking sector has taken actions an an early stage, keeping close track of the situation, projecting different scenarios and developing corresponding action plans, and has implemented a series of urgent measures to remove the difficulties for the production and business operations, supporting the businesses and the people.
Based on that, the commercial banks have conducted debt rescheduling for due loans (applicable to both principals and interest), waived and reduced the interest and transaction fees, continued to provide new loans for those businesses in need of finance to maintain and recover their operations to overcome the impacts of the pandemic. The SBV has also proactively proposed to the Government to provide refinancing loans 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. The credit institutions have also been robustly involved, reflecting their spirit of sharing, handling and creating favorable conditions for their borrowers to overcome the difficulties and recover their production and business operations.
An overview of the Conference in Khanh Hoa province
Speaking at the Conferences, Mr. Nguyen Quoc Hung, Director General of the Department of Credit for Economic Sectors, shared that, by June 22, 2020, 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 258,000 borrowers with the loan outstanding of VND 177 trillion; waived and reduced the interest for over 421,000 borrowers with the loan outstanding of over VND 1,260 trillion; provided new loans with preferential interest rates (0.5-2.5% lower than the rates applied before the outbreaks) with the accumulated amount since January 23, 2020 of VND 1,130 trillion for 238,000 borrowers.
The VBSP has extended debt payment for nearly 154,000 borrowers with the loan outstanding of over VND 3.875 trillion; adjusted loan maturities for over 75,000 borrowers with the loan outstanding of nearly VND 1.6 trillion; provided new loans to over 1 million borrowers with the loan outstanding of over VND 39 trillion.
At the two Conferences, the representatives from several associations and businesses made specific recommendations on extending validity of the interest reductions, further rescheduling debt payments and providing more new loans with lower interest rates. Several questions and concerns of the businesses received direct feedbacks from the SBV and the commercial banks at the Conferences.
On the provinces’ side, the Vice Chairpersons of the two PPCs made high evaluation for the positive results of the support from the local credit institutions, the timely promulgation of the directions and policies by the SBV.
In concluding the Conferences, Deputy Governor Nguyen Thi Hong affirmed that the banking system commits to provide sufficient capital for those enterprises and the people in need to support their production and business operations. The SBV would also continue to regulate the exchange rate policies in a flexible manner in order to create a favorable environment for the business community.
Moreover, the SBV Deputy Governor also required the SBV branches in the two provinces to continue to request and monitor closely the local credit institutions to effectively implement the directions and policies of the Government and the SBV with a view to supporting their customers to recover the production and business operations; enhance more efficiently the linkages between the banks and the enterprises in order to further resolve the difficulties and obstacles of the enterprises. For the credit institutions, on the basis of their financial situations, they can provide more support programs such as rescheduling more debt payments, waiving and reducing further the interest rates for the Covid-19 affected businesses and people.
Le Hang