On April 20, 2022, at the headquarters of the State Bank of Vietnam (SBV), Deputy Governor Pham Thanh Ha had a meeting with Mr. Zafer Mustafaoglu, the World Bank (WB) Practice Manager for Finance, Competitiveness and Innovation (FCI) for East Asia and Pacific.
Deputy Governor Pham Thanh Ha meets WB Practice Manager for FCI for East Asia and Pacific
At the meeting, Mr. Zafer Mustafaoglu thanked Deputy Governor Pham Thanh Ha for his hospitality and his chairmanship at the tripartite meeting on the Technical Assistance (TA) Project “Enhancing the Development and Soundness of the Banking Sector in Vietnam” funded by the Swiss State Secretariat for Economic Affairs (SECO) through the WB. Mr. Zafer Mustafaoglu congratulated the Government of Vietnam on its encouraging achievements in the economic development over the past years. Moreover, he also spoke highly of the efforts and the performance results that the SBV had achieved in the reform of the legal framework and the regulations for the management of the banking sector, the restructuring of the credit institutions and the handling of non-performing loans (NPLs). Mr. Zafer Mustafaoglu asserted that the WB always stands ready to support the SBV in the development of a modern finance and banking sector, the digital transformation/digital banking, the development of a supervisory mechanism of payment intermediaries, green growth, etc.
For his part, Deputy Governor Pham Thanh Ha highly appreciated the WB’s trust in Vietnam’s economic recovery, which had been reflected through the recent visits of several WB leaders to Vietnam. This was a message and a positive sign for other international institutions, foreign investors about the economic stability, the potentials and the room for further economic development, as well as the fast recovery after the pandemic in Vietnam. In the context of complicated developments around the world, the SBV Deputy Governor hoped to receive further effective cooperation from the WB to enhance Vietnam’s capabilities and resilience to long-term challenges.
An overview of the meeting
The SBV Deputy Governor acknowledged the effective support by the WB, especially the FCI Global Practice, to the finance and banking sector in Vietnam over the past time, including a USD 7 million grant provided by SECO through the WB through the Technical Assistance Project “Enhancing the Development and Soundness of the Banking Sector in Vietnam”. This was an important project, which is expected to assist the SBV in implementing effectively the Scheme of restructuring the credit institutions in association with NPL resolution during 2016-2020 and the following periods, addressing the structural limitations and obstacles within the banking system, meeting the international standards, and thereby contributing to maintaining the macroeconomic stability.
About the plan for the reform of the legal framework and regulations for the banking management, the SBV Deputy Governor shared that the SBV is currently focusing on improving the legal framework in the banking sector in line with the Development Strategy of Vietnam’s Banking Sector to 2025, Vision to 2030, creating a solid foundation for the improvement of the banking operations in the coming time. During 2022-2023, the SBV would review and amend a number of laws in the banking sector, such as the Law on the State Bank of Vietnam, the Law on Credit Institutions, and the Law on Deposit Insurance, while considering to formulate new laws, such as the Law on Payment Systems, and the Law for NPL Resolution. Resolution No. 42/2017 on the pilot implementation of NPL resolution had received the National Assembly’s approval to be extended until December 31, 2023. The Deputy Governor expressed his hope that the WB would continue to provide its pledged support; provide expertise and consultancy; share experience, lessons and appropriate models from other countries with similar socio-economic conditions to Vietnam, in order to advise the SBV throughout the process of reviewing and revising the relevant legal documents.
The SBV Governor also requested the WB to continue to support the SBV with the digital transformation in the banking sector, the realization of Vietnam’s climate commitments; the mobilization of long-term resources with low costs to support the green projects within the banking system, especially resources from the private sector/private funds; the implementation of joint studies and development of financial/credit products with green criteria, ensuring sustainable environmental factors.
Toward the end of the meeting, Deputy Governor Pham Thanh Ha wished Mr.Zafer Mustafaoglu a successful working visit, thereby contributing to promoting the cooperative relationship between the WB and Vietnam in general and between the WB and the SBV in particular.
Le Hang