In order to implement the objectives set by the Government in Resolution No 01/NQ-CP dated January 7, 2016, Resolution No.33/NQ-CP dated May 9, 2016 and Resolution 35/NQ-CP dated May 16, 2016, in the last six months of 2016, the SBV is affirmative to accomplish the defined objectives of Directive No.01/CT-NHNN dated February 23, 2016 on implementing several measures to ease the difficulties for business and production of enterprises while proactively contributing to controlling the inflation movement.
Implementing Resolution No. 01/NQ-CP dated January 7, 2016 of the Government on key measures for execution of the socio-economic development plan and state budgeting in 2016, the banking sector has proactively conducted several monetary policy solutions and obtained various positive results over the past five months. Specifically, money market was stable, the liquidity was secured, the state international reserve was increasing; the restructure of credit institutions and NPL resolution were carried out synchronously; the safety of banking sector continued to be maintained.
But these achievements aside, the recent macroeconomic situation is facing certain issues as the inflation appears to be in the increasing trend, the economic growth is lower than that of previous year; bank credit increases from the beginning of the year, however medium and long term loans and lending to real estate business are noticeably rising that creating pressure on interest rates; the foreign exchange and forex market continue to be negatively affected by the complicated and unexpected movement of the world economy.
In order to contribute to fulfilling the objectives set by the Government in Resolution No 01/NQ-CP dated January 7, 2016 and Resolution No.33/NQ-CP dated May 9, 2016 and Resolution 35/NQ-CP dated May 16, 2016, in the last six months of 2016, the SBV is affirmative to accomplish the defined objectives of Directive No.01/CT-NHNN dated February 23, 2016 on implementing several measures to ease the difficulties for business and production of enterprises while proactively controlling the inflation movement. On May 27, the Governor of the State Bank of Vietnam issued Directive No. 04/CT-NHNN on the implementation of monetary policy and safe and sound banking operations in the last 6 months of 2016. Accordingly, The SBV Governor required the SBV entities and credit institutions and foreign bank branches (hereafter called as credit institutions) to synchronously and satisfactorily implement several measures of monetary policy management and banking operations defined in Directive No.01/CT-NHNN and Directive No.02/CT-NHNN and other relevant documents.
For the entities of the SBV Head Office
- To closely watch the macro-economic and monetary movements and proactively manage the monetary policy instruments in a synchronous and flexible manner; the regulation instruments shall be taken mainly via OMO and refinancing instrument with reasonable maturities, quantity and interest rate in order to support the liquidity and capital resources for credit institutions in combination with securing the objective of inflation management.
- To strictly supervise credit growth of the system of credit institutions; decisively deal with violations of credit growth criteria set by the SBV.
- To focus credit resource for production, especially for agricultural and rural sector, exporters, supporting industries, small and medium enterprises, high-tech enterprises, and business formalization; strictly supervise and timely warn credit institutions with large and speedy extension of loans to potential risky sectors such as medium and long term loans for big customers, lending to real estate investment and business, transport BOT, BT projects.
- To review and complete legal framework of lending in line with laws and practical performance of credit institutions in order to create favorable condition for individuals and enterprises to get access to bank loans and effective service for production and business.
- To continue to maintain the scheme of daily central exchange rate and carry out appropriate measures for the aim of stabilizing exchange rate and forex market in line with macroeconomic regulation and monetary policy objectives.
- To continue to conduct synchronous measures to effectively manage forex market in line with macroeconomic and monetary movement and the targets of preventing dollarization set by the Government.
- To complete the schedule of legal document formulation on time with more concentration on researching and formulating policies and scheme that create favorable condition for individuals and enterprises to get access to banking services.
- To enhance supervision of money market and banking operations, taking severe and timely actions against violations of legal regulations with the concentration in following tasks:
Supervising credit institutions with a focus on their compliance with regulations on capital mobilization interest rate, credit provision, and loan restructure, debt classification, risk provision making and utilization for the aim of NPL resolution.
Continue supervising credit institutions’ compliance of legal regulations on housing subsidy lending scheme under the Resolution No.02/NQ-CP dated January 7, 2013 of the Government.
Inspecting and supervising the performance of credit institutions, especially weak institutions; supervising their implementation of the Scheme of credit institution restructure as approved by the SBV Governor...
Proactively carrying out solutions of restructuring credit institutions, NPL resolution in combination with conduction of Master scheme of restructuring the economy, focusing on following substances: Formulating scheme of restructuring credit institutions for period 2016 – 2020; Accelerating the process of resolving non performing loans in line with market principles; decisively conducting the classification of purchased loan for effective NPL resolution; Formulating more policies to develop debt purchasing market and encourage the participation of domestic and foreign investors, ...
For SBV Branches of provinces and the cities directly under the central government
- To closely collaborate with local authority to implement the programs on connecting commercial banks and enterprises in order to remove difficulties, obstacles for enterprises in timely manner and report the results to the SBV.
- To enhance supervision and strictly handle violations of the compliance with the SBV regulations and guide on monetary and banking operations;
- To closely collaborate with SBV entities and local credit institutions in their locations to disseminate information and communicate on monetary policy and banking performance, and well perform cooperation program with NA delegations.
For credit institutions
On the basis of SBV direction and management solutions, Governor asks the system of credit institutions to decisively conduct following tasks:
- Proactively balance capital mobilization and utilization to ensure the liquidity, stable interest rates toward reducing lending interest rates; To concentrate more on liquidity and maturity risk management to secure safety of banking system.
- To apply appropriate lending rates on the basis of financial capacity and balancing of mobilizing rates and risk posibility of the loans; to economize and mitigate the costs of operations for reducing the lending interest rates and easing difficulties for borrowers while ensuring financial safety of credit institutions.
- To manage credit growth rate in line with capital mobilizing capability and the maximum credit growth targets set by the SBV in order to ensure safe and effective credit extension; strictly control credit provision to potential risky sectors. To concentrate credit resource on production sector, especialy the priotity sectors defined by the Government. Accelerating the assessment and supervision of loans to ensure the rightful loan utilization purpose and limit new raising NPLs; strictly control quantity and structure of short term, medium and long terms in Vietnam dong and foreign currencies in accordance with capital mobilizing capacity, maturities and structure of credit institution.
Continue to take measures of risk managment while providing loans to real estate investment and business, transportation BOT and BT projects as guided by the SBV under the document No. 5492/NHNN-TD dated Jully 21, 2015, document No.6981/NHNN-TTGSNH dated September 14, 2015 and Directive No.05/CT-NHNN dated Jully 15, 2015. Orienting lending to real estate in to social and commercial housing lending for the aim of sufficiently meeting the real demand of customers; To review and revise or formulate new policies, internal process and regulations on credit provision to real estate projects, portential risky and long time recovering loans.
To study and formulate lending programs with appropriate interest rates toghether with innovation and symplification of lending procedures while securing capital recovery in line with laws, and improving capacity of credit institutions of credit assessment to save time and improve posibility to get access to bank loans for enterprises.
- To strictly comply with legal regulations and SBV’s guidance on mobilizing and lending interest rates, lending fee and regulations on foreign currencies buying and selling, foreign exchenge rate qoutation...
- To strengthen financial capacity and risk management, asset and credit quality, and NPL resolution; enhancing measure to secure safe and sound performance, and information security of credit institutions.
- To continue conducting synchronous measures of restructuring credit institutions and NPL resolution toward maintaining stable NPL ratio of the whole banking system below 3%.
- To diversify banking products and services to meet the requirement of enterprises and clients; improving the posibility of getting access to bank loans for enterprises on the basis of supporting programs set by the Government and relevant ministries in line with laws and SBV regulations on monetary and banking operations.
- To closely cooperate with SBV and SBV municipal branches to provide information to National Assembly delegations and mass media on results of monetary policy implementation and banking performance to obtain consensus and support from the public.
The Governor call on SBV entities at the headquarter, and SBV municipal and provincial branches to be accountable to push ahead the implementation of the tasks defined in this Directive, and report the implementation results monthly and quarterly to the SBV Office.
The SBV Office takes the lead in coordinating with the SBV entities to monitor the implementation of this Directive.
This Directive took effect on the date of signing.
Translated by Mai Huong