In the morning of May 6, Prime Minister Pham Minh Chinh chaired a meeting with the Standing Body of Hanoi Municipal Party Committee. Attending and speaking at the meeting, Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) assessed that the banking operations in Hanoi have contributed significantly to the socio-economic development of the capital city. The SBV Governor also said that, in order improve the credit accessibility, it is necessary to conduct other synchronous measures by all Ministries, agencies and local authorities, including Hanoi.
SBV Governor Nguyen Thi Hong speaks at the meeting (Photo: Duong Giang)
Speaking at the meeting, Governor Nguyen Thi Hong highly acknowledged the strong and comprehensive leadership of the Party Committee, the People’ Committee, and the People’s Council of Hanoi, as well as the Fatherland Front, the departments of Hanoi, the consensus and support among the businesses and the people in Hanoi. Despite the difficulties in production and business, Hanoi had still achieved a growth rate of 5.8% in the first quarter of 2023, higher than the country’s average of 3.32%, and had contributed significantly to the economic growth of the whole country.
The SBV Governor assessed that, in general, the banking operations in Hanoi have made significant contributions to the socio-economic development of the city, accounting for 20% of the total credit outstanding nationwide, including credit for the real estate and the transportation sectors, thereby helping to develop the transport and urban infrastructure, and the city’s economy as a whole.
Governor Nguyen Thi Hong mentioned that, over the past time, the leaders of Hanoi have paid a lot of attention to the banking operations, and the removal of the difficulties for businesses and the people; directed the city’s departments and agencies to coordinate with the SBV - Hanoi branch to organize several Bank-Enterprise Connection Conferences to resolve the difficulties and obstacles related to credit and the interest rates.
As of April 27, 2023, the credit growth rate in Hanoi increased by 2.93% (slightly lower than the rate of 3.04% of the whole country), while the economic growth rate was estimated at 5.8%. This showed that the capital resources for the economic growth, apart from the credit resources, also come from other important sources, such as public investment, FDI, etc.
Regarding the credit accessibility, the SBV Governor shared that the SBV had regulated the money market appropriately, ensured abundant liquidity, and has issued a Circular on the rescheduling of debt payment and the maintenance of debt groups by the credit institutions and the foreign bank branches. However, in order to improve further the credit accessibility, it is necessary to conduct other synchronous measures by all Ministries, agencies and local authorities, including Hanoi. For example, in the real estate sector, the difficulties are mainly stemmed from the legal obstacles. If those legal obstacles are resolved, the effectiveness of the policies on the rescheduling of debt payment and the maintenance of debt groups will be further enhanced, and the enterprises will be able to prove their cash flows to apply for new debt service schedules.
Responding to the proposal by the participants from Hanoi to expand the credit room in order to allow real estate businesses to access bank loans, the SBV Governor stated that the credit granting to businesses and real estate projects is completely decided by the credit institutions on the basis of the agreements with their customers. In the first months of this year, the credit institutions did not touch the credit growth ceiling. However, with the characteristics of the real estate credit, it often has long maturities and requires large amounts of money, so when granting credit, the credit institutions must balance their resources based on the actual capital mobilization and the use of capital to ensure credit granting while still ensuring the liquidity to pay their depositors. Therefore, the capital resources for businesses and real estate projects, apart from the banks’ credit, also need to be mobilized from other sources such as FDI, corporate bonds. (These are the current issues that the Government and the Prime Minister have been focusing on resolving to ensure healthy and sustainable development).
Le Hang