This is one of the requirements of the State Bank of Vietnam (SBV) stated in the recently issued Directive 03/CT-NHNN on management measures to credit and monetary policies and banking operations for the last months of 2013.
Accordingly, in implementation of the Resolution 01/NQ-CP of the Government dated January 7, 2013 on key solutions to realise the socioeconomic development plan and State budget estimations for 2013 and Resolution 02/NQ-CP on solutions to remove difficulties in production and business, support the market and resolve bad debts, the banking sector has been taking strict measures on monetary policy management in a prudent and flexible manner with the aim of curbing inflation, stabilising macro economy, removing difficulties in production and business, supporting the market and contributing to economic growth.
The management of the monetary policy and banking performance in the first half of 2013 achieved encouraging results namely controlling inflation at low rate, improving liquidity, decreasing lending rates, stabilising the forex market and exchange rate, gradually stabilising the gold market, restructuring credit institutions, and dealing with bad debts.
However, the banking sector is facing with a lot of problems. The credit regained growth momentum but remained at a low rate in comparison with the yearly target. Capital absorption of the economy remained because production and business activities of enterprises faced difficulties. The enforcement of housing lending support policy was puzzled. Exchange rate was sometimes volatile. High bad debts weakened the turnover of cash flows in the economy and reduced performance of credit institutions.
In order to take effective measures on management of the credit and monetary policy and banking operations for the final months of 2013, the SBV Governor issued Directive No. 03/CT-NHNN to require the whole banking sector to strictly and synchronously implementing measures stipulated in the Directive.
Accordingly, credit institutions must comprehensively and effectively implement solutions to mobilise capital, actively balance capital mobilised and capital used to ensure liquidity to meet credit needs for the economy and payment demand in the last months of 2013.
Besides, credit institutions are required to take effective measures to boost credit growth of the entire system to 12 percent as defined at the start of the year and continue to lend agriculture and rural development, export-driven production, supporting industries, SMEs and high-tech companies as specified by the Government
SBV also required credit institutions to take drastic measures to remove hindrance in their credit relationships with clients like restructuring maturity periods; reconsidering loan structure based on assessments of measures of removing production and business difficulties so as to ensure the match of lending periods and business cycles of enterprises and repayment capacity of borrowers. They were recommended not to conceal their own bad debts and hide bad production and business operations and financial health of borrowers. They were told to reduce interest rates and take back principal debts before interest rate debts if borrowers are in trouble with financial sources for repayment. State-owned banks must effectively and timely carry out housing loans as specified.
Based on regulatory interest rates set by the central bank, credit institutions should consider fixing suitable rates to stabilise the market rate and improve the capital structure and reviewing old debts to weigh on repayment rescheduling and interest rate cut.
SBV required credit institutions to proactively implement solutions to settle bad debts and prevent the new rise in bad debts, assess bad debts to sell eligible ones to Vietnam Asset Management Company (VAMC); continue to carry out restructuring plans in line with the Credit Institution Restructuring Scheme in the 2011-2015 phase, with focus given to restructuring contents and solutions guided by the SBV Governor for 2013.
Nguyen Thanh
Vietnamese
