Closing a conference between the government standing committee and commercial banks discussing solutions for socio-economic development on September 21, Prime Minister Pham Minh Chinh emphasized that the government will accompany commercial joint stock banks, and that economic and civil relations must not be criminalized.

In response to commercial banks’ proposal related to debt collection, collateral and fines for tax payment delays, Chinh assigned SBV and the Ministry of Finance (MOF) to propose collection of opinions from government members, so that the government can report to the National Assembly Standing Committee at the upcoming eighth National Assembly session.

The Prime Minister requested ministries and branches to work with enterprises to settle problems with the spirit of ‘five clears’: 1/ clear task officer, 2 /clear work, 3/ clear time, 4/ clear responsibility and 5/ clear product.

As for the banking sector, he asked to implement ‘six increases’, ‘six decreases’ and ‘six accelerations and breakthroughs’.

The ‘six increases’ include 1/ increasing capability of credit institutions, including private joint stock banks; 2/ increasing capability to absorb credit, especially SMEs (small and medium enterprises); 3/ increasing traditional growth driving forces and new growth driving forces; 4/ increasing the close and effective cooperation between the state, banks, and enterprises, as well as governance capability of banks and the financial market; 5/ increasing transparency and publicity of information about deposit and lending interest rates and the fight against black credit; and 6/ increasing monitoring, inspection and risk prevention, as well as increasing the fight against embezzlement and negative elements in the banking system.

The ‘six decreases’ include 1/ decreasing interest rates; 2/ decreasing transaction costs and operation costs; 3/ decreasing the number of procedures clients have to follow; 4/ decreasing inconvenience and harassment; 5/ decreasing wrongdoings, group interests; and 6/ decreasing bad debts.

The ‘six accelerations and breakthroughs’ include 1/ accelerations in digitization; 2/ breakthroughs in service quality; 3/ accelerations in workforce quality; 4/ breakthroughs in banking infrastructure; 5/ accelerations in creating jobs and livelihood for people; and 6 /breakthroughs in conquering foreign markets.

Dealing with violations 

The Prime Minister has asked SBV to immediately implement measures to help people and businesses in storm-stricken areas overcome difficulties and quickly resume normal lives; enact policies on extending debt payment deadlines, freezing debts, providing unsecured loans and launching zero-dong credit packages.  

He has also asked to ensure credit safety while promoting credit. The targeted credit growth rate is 15 percent for 2024.

MOF and SBV have been asked to continue to implement solutions to the corporate bond market and stock market development, so they can grow healthily and sustainably.

The Prime Minister asked the Ministry of Public Security to not criminalize economic relations, and apply drastic measures to handle violations, thereby creating an environment to develop a system of financial institutions to provide consumer loans, which will help stop black credit.

He has also warned the private sector in general and joint stock banks in particular against illegal business and tax evasion.

At the conference, SBV Deputy Governor Pham Quang Dung said commercial banks have been requested to cut interest rates and publicize their interest rates on websites.

The average lending interest rates applied to old and new loans have decreased further with an interest rate cut of one percent as of the end of August over the end of 2023.

The interest rates offered by private joint stock banks have fallen by 0.96 percent, now hovering around 9.17 percent, higher than the average interest rate of the whole banking system and state-owned commercial banks.

Regarding the VND120 trillion credit package disbursed for social housing development projects, apartment rebuilding and improvement, four more commercial banks have joined the program with the credit limit of VND20 trillion (VND5 trillion each).

SBV has instructed commercial banks to raise the interest rate cuts applied to home buyers from 2 percent to 3 percent in the first five years. The interest rates to be applied in the next five years would be 1-2 percent lower than the medium- and long-term lending interest rates of four state-owned banks.

Thu Hang