On February 20, 2024, in Hanoi, the State Bank of Vietnam (SBV) organized a virtual Conference of the banking sector on promoting the banking credit in 2024. The Conference was co-chaired by Governor Nguyen Thi Hong and Deputy Governor Dao Minh Tu, with the attendance of representatives from the SBV entities, the SBV municipal and provincial branches, Vietnam Banks’ Association, and the commercial banks in Vietnam.
In her opening speech, Governor Nguyen Thi Hong said that in 2024, the world economic growth rate is projected to be at lower level than that of 2023; the international financial situations would continue to face difficulties and challenges. As an economy with high openness, Vietnam would be certainly affected by the fluctuations in the international markets. Therefore, right from the beginning of 2024, the SBV has shown strong determination in the implementation of the Government’s and the Prime Minister’s directions on giving priority to supporting the economic growth, while still maintaining the macro-economic stability and the inflation control.
An overview of the Conference
Delivering a report at the Conference, Ms. Ha Thu Giang, Director General of the Department of Credit for Economic Sectors, said that by end of 2023, the total credit outstanding in the economy had increased by 13.71% as compared to that of the end of 2022. However, in January 2024, the credit outstanding in the entire system had decreased by 0.6% in comparison with that of the end of 2023. Explaining about this decrease of credit in the first month of 2024, the leaders of the commercial banks said that it is absolutely normal due to customers’ psychology, and a slowdown in the economic activities because of the festive season.
According to SBV Deputy Governor Dao Minh Tu, a decrease of credit in the entire banking system in the first month of 2024 may be a normal economic trend (before and after the Lunar New Year, the credit growth is often on downward trend), but it may also reflect a slow recovery of the economy, resulting in the weak credit absorbability. Therefore, in order to promote the credit growth, the credit institutions need to focus on specific measures, such as directing the credit flows into the priority sectors and areas, and those with good recovery potentials.
In order to proactively respond to every situation, the SBV Governor emphasized that the entire banking sector should enhance their sense of responsibility in all operations to support businesses and the people. The SBV had disseminated the credit growth targets to each credit institution based on their classification in alignment with Circular 52. Accordingly, the credit institutions could develop their business plans for realization of the credit targets.
Ms. Ha Thu Giang, Director General of the Department of Credit for Economic Sectors, shared that the SBV would focus on the key tasks and measures in its credit management in 2024. Specifically, the SBV had set out the credit growth rate of the entire banking sector at about 15%, with appropriate adjustments in line with the practical situations; considered to innovate the management of the credit growth; conducted measures of credit management in a proactive and flexible manner in line with the macro-economic and the inflation situations, meeting the capital demand of the economy.
Ms. Ha Thu Giang, Director General of the Department of Credit for Economic Sectors, speaks at the Conference
Moreover, the SBV has directed the credit institutions to extend credit safely and effectively, focusing credit on production and business operations, the priority sectors and the growth drivers; continue to closely control credit for potentially risky areas; review and simplify the procedures and dossiers of lending and mortgaged assets, creating favorable conditions for businesses and the people to access bank loans; extend credit for production and business activities serving daily life and consumption, contributing to controlling “black credit”.
The SBV has also directed the credit institutions to continue to strongly implement the credit programs and policies as directed by the Government and the Prime Minister; regularly organized bank-enterprise connection conferences in all cities and provinces; continue to implement the programs and the action plans of the banking sector.
Toward the end of the Conference, Deputy Governor Dao Minh Tu requested the entire banking sector to strengthen the implementation of the following tasks:
For the commercial banks: strongly and effectively implement the measures and the tasks as stipulated in Directive No. 01/CT-NHNN dated January 15, 2024 issued by the SBV Governor; Resolution No.103/2003/QH15 dated November 9, 2023 of the National Assembly, other relevant Government’s resolutions, etc.; strictly implement the measures on the credit growth, promptly meet the capital demand of the economy; strictly control credit for potential risky areas; ensure the safety and efficiency of the credit activities, etc.
Regarding credit for the real estate sector: (i) Continue to review and classify real estate projects to promptly provide appropriate credit solutions to eligible businesses and real estate projects, (ii) Proactively provide guidance and create favorable conditions for home buyers to access bank credit to meet their housing capital needs; (iii) Promote the implementation of the VND 120 trillion credit program for investors and home buyers of social housing projects, housing for workers, etc..
Regarding credit for the transport sectors (BOT and BT projects): Continue to monitor the credit granting for the existing projects, promptly report to the competent authorities to resolve any difficulties and obstacles related to the credit granting to those projects. For new projects, the commercial banks need to proactively assess and decide to provide loans on the basis of evaluating the effectiveness of the projects, the customer's ability to pay the debts, and the ability to balance capital according to the relevant regulations.
Regarding credit for the key national projects: Enhance the responsibility in the appraisal and review of the lending decisions for large and key national projects in accordance with the law; Strengthen the co-financing for large and key projects to enhance the capital supply capacity and the credit quality; Regularly collect information about the large projects and borrowers; proactively cooperate with the customers to resolve any arising difficulties and obstacles.
Regarding credit for the oil and gas businesses: Continue to create favorable conditions for the key oil and gas businesses in line with the current credit principles and the applicable provisions of law; proactively balance the capital resources to promptly and fully meet the capital demands of the key oil and gas businesses (as listed on the website of the Ministry of Industry and Trade).
Regarding green credit, Deputy Governor Dao Minh Tu requested the relevant entities to continue to conduct effectively the measures as stated in the Action Plan of the banking sector to implement the National Green Growth Strategy for the 2021-2030 period, and the Scheme on the tasks and measures to implement Vietnam’s commitments made at the 26th UN Climate Change Conference of the Parties (COP26); concentrate resources to finance green economic sectors and fields, promoting the implementation of COP26 commitments; continue to effectively implement the policy credit programs at the Bank for Social Policies.
The Deputy Governor also requested the commercial banks to further review and simplify their processes and procedures for credit granting, optimize the application of the digital transformation in the credit granting processes; create favorable conditions for people and businesses to access bank loans; diversify bank credit products and services; proactively and promptly provide information and communication about the credit institutions' policies, products and services to enable people and businesses to fully understand and easily access; continue to implement the policy on scheduling debt payment and maintaining the debt groups in accordance with Circular No.02/2023/TT-NHNN, etc.
For the SBV municipal and provincial branches, the SBV Deputy Governor requested them to strengthen the implementation of the tasks and measures as stated in Directive No.01/CT-NHNN on the arrangements for the implementation of the key tasks of the banking sector in 2024, Directive No.02/CT-NHNN on promoting the digital transformation and ensuring information security and safety in the banking operations, and Decision No.83/QD-NHNN on the SBV’s action plan to implement the Government’s and the Prime Minister’s directions on the banking operations in 2024; direct the credit institutions’ branches in their areas to (i) grant credit to production and business operations, the priority areas and the growth drivers in accordance with the Government's policy, (ii) enhance the implementation of the VND 120 trillion credit program for investors and home buyers of social housing projects, housing for workers, etc. and (iii) ensure the credit supply to support the Project of "Sustainable development of one million hectares of high-quality and low emission rice associated with green growth in the Mekong Delta by 2030"; monitor the socio-economic situations and the banking operations in their areas; coordinate with the local departments and agencies to promote the organization of bank-enterprise connection conferences, etc.
The SBV Deputy Governor also requested the SBV departments to further advise the SBV Board of Management on the effective implementation of the measures for the management of the monetary policy, credit, the interest rates, and the improvement of the legal documents and mechanisms, etc.
Le Hang