Regarding credit growth, he said the SBV has solutions to control credit for risky sectors like securities and real estate, elaborating that it may adjust the rate of short-term capital used to provide medium- and long-term loans or only give loans to social and low-income housing segments.

Meanwhile, only banks with bad debt percentage of under 3 percent are allowed to provide loans for the field of securities. Loans for investment in securities must be within 5 percent of banks’ charter capital, Hung said.

The central bank believes that these regulations are strict enough to control risks, he added.

The SBV requested banks to restructure and freeze debt owed by people affected by typhoons Doksuri and Damrey, which respectively hit Vietnam in mid-September and early November, and continue assessing damage.

The Vietnam Bank for Social Policies will continue making review to freeze or reschedule debt and provide more loans, the Governor noted, adding that it can ask the SBV and the Finance Ministry for debt cancellation if necessary.

In terms of credit institution restructuring, Hung said the move is meant to improve credit access. The State will make drastic steps to restructure the banking system and handle non-performing loans to ensure the safety of the system, he noted.

He expressed his belief that banking activities will become safer and healthier in the time ahead.

The central bank governor was among officials set to answer lawmakers’ questions regarding issues within their remits. The question and answer sessions are part of the ongoing fourth session of the 14th National Assembly.

Voters, deputies pleased with SBV Governor’s answer at NA session

National Assembly (NA) deputies and voters highly evaluated answers of State Bank of Vietnam (SBV) Governor Le Minh Hung at the NA fourth session’s question and answer part on November 17.

Head of the NA Committee for Finance and Budget Le Thanh Van said the new cabinet member cleared voters’ concerns by clarifying thoroughly many issues of the banking sector, including the mobilization of gold in the community for socio-economic development, the control of exchange rates and interest rates.

Tran Hoang Ngan, a deputy from Ho Chi Minh City held that Governor Hung was very confident of the State Bank’s performance achievements, including supporting economic growth, controlling inflation, stabilizing currency, and employment.

Ngan showed support for measures dealing with weak performing credit organizations presented by the head of the banking sector, but expressed hopes for completing the legal framework for the credit organizations, including the adjustments to some articles of the Law on Credit Organizations.

During the November 17 sitting, NA deputies raised many questions on the management of monetary policy, production support, banking sector operation safety, information technology application in administrative procedures, and more.

Voter Phan Hai from the Da Nang Young Entrepreneurs’ Association said that he was impressed with SBV Governor Hung’s persuasive measures to tackle bad debts and weak credit organizations as well as his promise to reach the set credit growth target and control credit quality.

Meanwhile, Bui Ngoc Diep, Vice President of the Small and Medium-Sized Enterprises of Ba Ria-Vung Tau province said that the banking sector should design more specific policies to support startups through helping them in capital access.

Le Nhu Tuan, Director of the Department of Agriculture and Rural Development of the central province of Thanh Hoa lauded the SBV Governor’s commitments to rescheduling loans for people who have been affected by the recent floods, to help them restore normal production.

VNA