On September 28, 2021 afternoon in Hanoi, the State Bank of Vietnam (SBV) held a virtual Conference under the chairmanship of Deputy Governor Dao Minh Tu on the measures to help the COVID-affected aviation businesses in accordance with Resolution No.105/NQ-CP of the Government.
Deputy Governor Dao Minh Tu speaks at the Conference
The Conference was also attended by representatives from the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Transport, the Commission for the Management of State Capital at Enterprises (CMSC); the SBV departments, Vietnam Banks Association (VNBA), Vietnam Aviation Business Association; leaders of various commercial banks and aviation businesses in Vietnam.
In his opening speech, Deputy Governor Dao Minh Tu shared that the complicated developments of the COVID-19 pandemic had caused adverse impacts on all aspects of the socio-economic life, businesses and people, including aviation businesses. Therefore, the Government in general and the SBV in particular have initiated multiple measures and solutions to support the businesses and the people, such as debt rescheduling, waving and reducing interest and banking fees, maintaining debt classifications, etc.
Besides, implementing the Resolutions of the National Assembly, the Government and the Prime Minister's Decision on measures and solutions to remove difficulties for Vietnam Airlines Corporation (VNA), the SBV has issued Circular No.04/2021/TT-NHNN, according to which VND 4 trillion with the interest rate of 0% with no collateral requirement has been refinanced to the credit institutions in order to on-lend to the VNA. Up to now, the SBV has issued decisions on refinancing and disbursing capital to the credit institutions after the credit institutions have provided loans to the VNA in accordance with the Government's Resolution.
At the Conference, Mr. Nguyen Xuan Bac, Deputy Director General of the SBV Department of Credit for Economic Sectors, stated that currently, the credit outstanding of the aviation businesses at the credit institutions is more than VND 24 trillion, of which the loan outstanding that has been rescheduled is more than VND 2.5 trillion. The credit institutions have reduced their lending interest rates by 0.5 percentage points p.a. to 1 percentage points p.a., with the amount of interest that has been reduced estimated at VND 130 billion; the amount of new loans approved since the first coronavirus outbreaks is VND 41,648 billion. Those results showed the enormous support from the credit institution system for the aviation businesses. Particularly for the VNA, the credit institutions have disbursed to VNA based on the VND 4 trillion credit package from the SBV’s refinancing sources in accordance with the Government's Resolution.
An overview of the Conference
On behalf of the aviation industry, Mr. Bui Doan Ne, Vice President cum General Secretary of Vietnam Aviation Business Association, said that the epidemic has been going on for longer than expected, forcing the aviation businesses to suspend or reduce their operations for a very long time. The impacts of theCOVID-19 pandemic has got beyond the aviation businesses' resilience and affordability. Therefore, he hoped that in the coming time, the banking industry would extend more support to the aviation industry, in addition to the internal efforts of the aviation businesses, to overcome this difficult time.
On the side of the banking sector, VNBA General Secretary Nguyen Quoc Hung shared that the banking industry has made its best efforts by rescheduling the loan maturities, waving and reducing interest and banking fees, maintaining debt classifications not only for the aviation industry but also for all businesses and the people. He hoped for stronger and more proactive engagement of the relevant ministries and agencies in order to provide more support to the aviation industry in the near future.
In his concluding remarks at the Conference, First Deputy Governor Dao Minh Tu emphasized the following:
(i) The SBV would continue to closely monitor the situations, listen to the businesses' recommendations in order to make prompt and appropriate adjustments to the current regulations on debt rescheduling, waving and reducing the interest and banking fees, maintaining debt classifications in line with the disease developments, while still ensuring safety of the whole banking system.
(ii) The SBV would also continue to monitor the interest rate developments and direct the credit institutions to cut down their expenditures and consider to lower their lending interest rates to further support the COVID-19 affected businesses.
(iii) The SBV would consider and adjust the space for the credit institutions to increase their credit growth based on the credit institutions’ capital balances, the appraisal the viability of the loan proposals, and taking own responsibility for the decisions on extending credit.
(iv) For the proposed measures that go beyond the SBV’s authority, the SBV supports in principle, and suggested that the relevant ministries and agencies, especially the Ministry of Transport as the responsible ministry to report and make recommendations to the National Assembly and the Government in order to come up with a legal ground for the implementation.
Le Hang