According to reports from credit institutions, as of September 25, the total outstanding debt affected by Typhoon No. 3 in 26 provinces and cities reached 65 trillion VND (approximately $2.7 billion), impacting over 94,000 customers.

This information was shared by representatives of the State Bank of Vietnam (SBV) during a seminar organized by Tien Phong Newspaper titled "Overcoming the Aftermath of Typhoon No. 3 – Support for Citizens and Businesses."

Ms. Ha Thu Giang, Head of the SBV Credit Department, noted that the central bank is gathering feedback from relevant parties on a draft circular outlining the restructuring of debt repayment schedules for customers affected by Typhoon No. 3.

This new circular will apply to credit institutions and their customers in 26 provinces and cities facing challenges in repaying loans due to the damage caused by the typhoon. Other relevant organizations and individuals involved in the debt restructuring process will also be covered by the circular.

Debt restructuring for those impacted by the typhoon will be carried out according to the regulations outlined in this circular, while other debt-related matters will follow existing legal frameworks.

The draft circular is currently under consultation, with the SBV expected to consolidate feedback by October 3, 2024. The SBV is also working with the Ministry of Planning and Investment to report to the Prime Minister regarding debt deferral. The maximum deferral period is set at two years, and interest payments during this period will be covered by local budgets. Should any province face financial difficulties, a detailed report will be submitted to facilitate central government support.

Once approved by the government and the new circular is in place, the SBV will issue further directives for implementation across the banking system and conduct surveys to assess the situation in each province.

"This is part of the banking sector's broader plan to help localities, businesses, and residents recover from the devastation caused by Typhoon No. 3," Ms. Ha Thu Giang emphasized.

For loans under the preferential agriculture and rural development package, Ms. Giang explained that credit institutions will follow pre-existing mechanisms to support affected customers. Specifically, the government has amended Decree 55 to include updated policies on handling risks in the event of natural disasters or disease outbreaks. Credit institutions can restructure repayment terms, maintain current debt classifications, reduce loan interest rates, and issue new loans to assist customers in recovering their business operations.

Giang also highlighted that during the challenges posed by the COVID-19 pandemic, the banking sector implemented comprehensive measures to support the country’s economic and social development. This included the effective issuance of SBV Circular 02, which outlines debt restructuring policies, with the policy extended until December 31, 2024.

On behalf of the Vietnam Bank for Social Policies (VBSP), Deputy General Director Huynh Van Thuan stated that the VBSP has also extended debt repayment deadlines for loans due starting from September 2024. The maximum extension is 12 months for short-term loans and half of the loan term for medium and long-term loans.

"Based on the local demand for loans, the VBSP will develop a proposal to increase the 2024 credit growth target, balance available capital, and report to the Ministry of Planning and Investment and the Ministry of Finance. A proposal for an additional 4.9 trillion VND ($200 million) will be submitted to the Prime Minister for consideration in October 2024," Mr. Thuan added.

Tuan Nguyen