According to First Deputy Governor Dao Minh Tu, based on the objectives of the National Assembly and the Government as set out in the Socio-Economic Development Plan for 2022, continuing to closely follow the macro-economic and market developments, the SBV will continue to operate the monetary policy in a proactive, flexible and prudent manner, in close coordination with the fiscal policy and other macro-economic policies in order to control the inflation, contributing to maintaining the macroeconomic stability, supporting the economic recovery and promptly adapting to the international and domestic market developments.
First Deputy Governor Dao Minh Tu chairs the Conference
In the morning of December 28, 2021 in Hanoi, the State Bank of Vietnam (SBV) organized a Press Conference under the chairmanship of First Deputy Governor Dao Minh Tu to disseminate the results of the monetary policy management and the banking operations in 2021, and the orientations for 2022. Also attending the Press Conference, there were representatives from the SBV entities, the SBV branch in Hanoi, commercial banks, Vietnam Bank for Social Policies, the Deposit Insurance of Vietnam, etc.
Proactive and Flexible
Speaking at the Press Conference, First Deputy Governor Dao Minh Tu informed that, in the year of 2021, facing unprecedented difficulties and challenges, implementing the directions of the Government and the Prime Minister in a proactive and flexible manner, the banking sector has effectively conducted the solutions for the management of the monetary policy and the banking operations in order to control the inflation, contributing to maintaining the macroeconomic stability. Beside that, the banking industry has proactively followed the market developments and focused all available resources on resolving the difficulties in production and business, supporting the COVID-affected businesses and people, contributing to enhancing the recovery of the economic growth.
First Deputy Governor Dao Minh Tu chairs the Conference
Accordingly, the SBV has managed the monetary tools in a comprehensive manner to regulate the liquidity appropriately; the money market has been stable; the inter-bank interest rates have been remained at low levels, supporting the credit institutions to reduce their capital costs, thereby allowing them to cut down their lending interest rates. The SBV has maintained the key interest rates, creating favorable conditions for the credit institutions to access the SBV’s capital resources with low costs; continuing to instruct the credit institutions to balance their financial capacity, reduce their operational costs and focus all available resources on reducing the lending interest rates. As a result, 16 commercial banks (accounting for 75% of the total loan outstandings of the economy) have cut down their lending interest rates as committed with Vietnam Banks’ Association; managing the exchange rates in a proactive and flexible manner in line with the international and domestic developments, as well as macro balances and the monetary policy objectives; the market liquidity has been ensured for smooth operations, and the legitimate demands for foreign currencies have been promptly and fully met.
The SBV has continued to implement several solutions to control the credit scale in association with credit quality improvement. In addition, the SBV has directed the credit institutions to focus on safe and efficient credit growth, focusing credit on production and priority areas according to the Government's policy; strictly controlling credit in potentially risky areas such as real estate, securities, BOT and BT projects; strengthening risk management in extending credit for living demands and consumer loans; creating favorable conditions for businesses and the people to access bank loans.
Moreover, in order to continue to create favorable conditions for the people and businesses to access bank credit, meeting people's legitimate demands, and contributing to controlling "black credit", the banking industry has drastically deployed various solutions, i.e. promoting the technological application, developing online services, expanding the banking networks, diversifying products and services, reducing interest rates, simplifying lending procedures in order to meet the borrowing needs of the people and businesses.
With the SBV's synchronous instructions and solutions, despite the negative effects of the COVID-19 pandemic, the credit for the whole economy started to increase right from the beginning of the year, and reached a higher level than that of the same period in 2020. By December 22, 2021, the credit for the economy had increased by 12.68% as compared to that of the end of 2020, an increase of about 14.57% as compared to that of the same period in 2020. The credit outstanding of 23 policy credit programs implemented by the VBSP, as of November 30, 2021, reached VND 245,199 billion, with more than 6.4 million poor and near-poor households and other policy beneficiaries involved, an increase of 8.4% as compared to the credit amount of 2020.
Focusing all available resources on removing difficulties in production and business
The SBV has drastically implemented various solutions to support the people and businesses to overcome the difficulties caused by the COVID-19 pandemic; accelerating the rescheduling of debt repayment terms, exemption and reduction of banking interest and fees; maintaining debt classifications. The SBV has revised Circular No. 01/2020/TT-NHNN twice in order to support the COVID-affected businesses and people.
By December 20, 2021, the credit institutions had rescheduled the repayment terms, maintained debt classifications with the accumulated debt value of about VND 607,000 billion; about 775,000 COVID-affected customers are beneficiaries of the debt repayment rescheduling, with the total loan outstanding of over VND 296,000 billion; over 1.96 million COVID-affected customers have benefited from the banking interest and fee exemption, waivers and reduction, with the total loan outstanding of more than VND 3,870 trillion; the total amount of accumulated interest that has been exempted, reduced or lowered by the credit institutions for their customers up to now is about VND 34,900 billion. The accumulated amount of new loans with lower interest rates than the pre-pandemic time, since January 23, 2020, has reached over VND 7,400 trillion, for about 1.3 million borrowers.
Besides, the SBV has continued to implement solutions on exemption and reduction of payment service fees to support the people and businesses to overcome the difficulties caused by the COVID-19 epidemic. It is estimated that the number of free-of-charge transactions now accounts for about 80%, the total amount of payment service fees through the interbank electronic payment system and through the clearing switching system (Napas system) from 2020 until end of 2021 that has been exempted is estimated at VND 2,557 billion, and over VND 250 billion of credit information service fees has been reduced in 2021.
The SBV has also organized several Bank-Business Connection Programs in order to identify difficulties and problems faced by the businesses and conduct appropriate solutions; implementing a program on providing loans to employers for paying work suspension benefits and wages/salaries to recover their production and business operations with zero interest rate and requiring no collateral in line with Resolution No.68/NQ-CP, and Resolution No.126/NQ-CP. By December 10, 2021, the VBSP had disbursed VND 1,570 billion to 2,064 employers to help them pay the benefits and wages/salaries for 428,402 employees. Additionally, the SBV had refinanced several commercial banks, which had provided loans to Vietnam Airlines Corporation (VNA); and helped to remove the difficulties in rice purchasing in the Mekong Delta Region.
The restructuring of the system of credit institutions in association with NPL resolution has continued to be implemented drastically and effectively.
The digital eco-system and digital payment of the banking system has been established and connected with the services in other economic sectors, bringing about many convenient services to the people. Payment operations in the economy have been carried out safely, efficiently and smoothly. The progress of cashless payment promotion in the 10 months of 2021, as compared to that of the same period in 2020, is as follows: transactions via POS increased by 14.25% and 12.6% in terms of transaction numbers and value respectively; transactions via the Internet increased by 49.39% and 29.14% respectively; transactions via the mobile phone channel increased by 72.67% and 85.09% respectively; transactions via the QR code channel increased by 54.24% and 120.64% respectively, with more than 90,000 QR code acceptance points.
The administrative reform and the e-Government implementation have continued to be promoted. The SBV has basically fulfilled its tasks in the E-Government Implementation Plan, contributing to modernizing the management and administration of the banking operations, improving the effectiveness and efficiency of the SBV's operations towards a digital government, a digital economy and a digital society; the information safety and cyber security has been ensured; contributing to the upgrading of Vietnam's e-Government rankings.
The SBV has proactively developed and implemented appropriate and effective communication plans, contributing to the information transparency, maintaining the macro-economic stability and controlling the inflation. In particular, the SBV has introduced several financial education programs, such as the "Hold the purse-strings" program, which has been broadcast on Vietnam Television (VTV), contributing to guiding the people in using banking products and services, increasing the understanding among the public and improving the people's confidence in banking products and services, contributing to limiting “black credit”.
Orientations for 2022
In answering the correspondents' questions, First Deputy Governor Dao Minh Tu shared that, based on the targets set by the National Assembly and the Government, as well as the macroeconomic and the monetary developments in the domestic and international markets, the SBV would continue to manage the monetary policy in a proactive and flexible manner in line with the fiscal policy and other macroeconomic policies in order to control the inflation, maintain the market stability, support the economic recovery, focusing on the specific tasks as follows:
First, operating the interest rates in accordance with the macro balances, the inflation, the market development and the monetary policy objectives; encouraging the credit institutions to continue to reduce their operational costs to further reduce their lending interest rates; facilitating to reduce the capital costs for the people, businesses and the economy.
Second, managing the exchange rates in a proactive and flexible manner in line with the domestic and international market situations, the macro balances and the monetary policy objectives; contributing to controlling the inflation and maintaining the macro-economic stability.
Third, administering the credit solutions to control the inflation and support the recovery of the economic growth; directing the credit institutions to safely and effectively increase their credit growths, controlling and resolving NPLs; focusing credit on production and priority fields and areas in accordance with the Government's policy; strictly controlling credit in potentially risky areas; continuing to implement synchronous solutions to support the people to access bank loans and remove difficulties for the COVID-affected customers.
Fourth, implementing the Scheme on Restructuring the Credit Institutions in association with NPL resolution for the 2021-2025 period, after its approval.
Fifth, promoting the digital transformation, the cashless payment in the banking operations, and ensuring the security and safety of payment operations; Focusing on implementing the Scheme on Cashless Payment Promotion for the period of 2021-2025, the Strategy for Developing Vietnam's Payment System until 2025 and orientations to 2030; formulating a new Decree on Cashless Payment and a Decree on a controlled pilot scheme for Fintech in the banking sector; Implementing the Plan on Digital Transformation of the Banking Sector until 2025, Vision to 2030; coordinating with the relevant ministries and agencies to implement a pilot project on the use of telecommunication accounts to pay for goods and services of small value (Mobile-Money), etc.
Le Hang