Key Banking Tasks in 2021

10:17:26 AM | 13/1/2021

On January 7, 2020, the Governor of the State Bank of Vietnam (SBV) issued Directive 01/CT-NHNN on implementation of key tasks of the banking sector in 2021.

According to the directive, implementing the National Assembly's Resolution 124/2020/QH14 dated November 11, 2020 on socioeconomic development plan in 2021, the Government’s Resolution 01/NQ-CP dated January 1, 2021 on main tasks and solutions on socioeconomic development plan and State budget estimate in 2021, and Resolution 02/NQ-CP dated January 1, 2021 on continued implementation of main tasks and solutions for better business environment and stronger national competitiveness in 2021, the Governor of the State Bank of Vietnam told SBV units, credit institutions, foreign bank branches (collectively credit institutions) to thoroughly grasp the Government's motto of action in 2021 of “Solidarity, discipline, innovation, development aspirations” to effectively carry out monetary policies and banking administration solutions in 2021 in order to control inflation, stabilize macroeconomic performance, and support reasonable economic growth.

The Directive outlines overall objectives and tasks of the banking industry in 2021 as below:

Actively, flexibly operating the monetary policy and closely coordinating it with fiscal policy and other macroeconomic policies to control inflation within the target of 4% set for 2021, support macroeconomic stability, revive economic growth, maintain monetary and foreign exchange markets. In 2021, the total means of payment will increase by about 12% and credit growth will be about 12% and these indicators will be adjusted to real life. Reasonable credit growth will be aligned with improved credit quality, focusing on priority production areas. Risks will be controlled in potentially risky areas.

Consistently implementing forex management solutions to stabilize the foreign currency market and the gold market, gradually transform them into capital sources for production and business activities, support monetary management and macroeconomic stability policies; increase forex reserves when market conditions are favorable.

Further restructuring credit institutions, especially weak units. Actively applying measures to handle bad debts, controlling and limiting new bad debts; strengthening, consolidating and reorganizing people's credit funds to ensure purposed and principled operations; intensely inspecting and supervising operations of credit institutions, especially in risky areas, ensuring safety and compliance with legal regulations.

Speeding up noncash payment, digital transformation in banking operations, renovating and upgrading information technology infrastructure, expanding the digital ecosystem to develop banking products and services; monitoring payment systems to ensure secure and efficient operation; supervising the provision of payment intermediary services to ensure compliance with the law; enhancing security and safety in electronic payment and card payment; improving the legal framework, mechanisms and policies on payments to ensure consistency and responsiveness to rapid technological changes and new payment models and service development.

Focusing on effective and substantive administrative reform to make the business environment in general and the monetary and banking sector more open, convenient, and supportive for business operations; improving administrative performance and the quality of public employees, ensuring discipline and respect for the law.

Implementing the Vietnam Banking Industry Development Strategy to 2025, with a vision to 2030, the National Comprehensive Financial Strategy to 2025, with an orientation to 2030, and action programs/plans and projects of the banking sector.

To successfully carry out the above objectives and tasks, the SBV Governor required his assistants, based on their functions and duties, to advise him and carry out solutions within their jurisdiction. Central tasks will be: Completing the legal framework for the monetary and banking sector; administering monetary, credit, foreign exchange and gold policies; restructuring credit institutions and handling bad debts; strengthening inspection and supervision; preventing violations in the banking sector; strengthening operations of people’s credit funds, handling weak people’s credit funds and intensifying the management and supervision of microfinance institutions; scaling up noncash payment; accelerating digital transformation in banking operations; ensuring security of information technology, electronic payment and card payment; boosting public administration reform; and reforming administrative discipline, civil services and apparatus.

The directive clarified a number of other key tasks for SBV units: Actively advancing international cooperation and integration, promoting bilateral and multilateral cooperation in the banking sector; strengthening relationships and actively taking part in policy-making and initiatives, enhancing the position and the voice of Vietnam and the State Bank of Vietnam at regional/global financial and monetary institutions, forums and other international partners; effectively mobilizing and carrying out programs, projects, consulting and technical support of international partners for Vietnam and the banking sector.

Carrying out professional and effective communications and enhancing information transparency to meet SBV’s information requirements and comply with international commitments; proactively implementing appropriate and effective communication plans, strengthening communication coordination before, during, and after introducing new mechanisms and policies to have public consensus; effectively implement the SBV’s regulations on speech and information provision; developing and choosing innovative forms for communication and education programs to raise public knowledge of finance and banking; intensifying State management of communications in the banking sector to ensure consistency and uniformity from central to local levels and among credit institutions, finance companies, and banking press agencies. Banking press agencies will closely follow the SBV’s instructions, promote policy communications and matters of public concern.

As for SBV branches, the Governor required: Carrying out monetary, credit and foreign exchange policies in their localities; restructuring credit institutions and handling bad debts; strengthening inspection and supervision; preventing acts of violation in the banking sector; stepping up management of operations of people’s credit funds; scaling up noncash payment; and ensuring security of information technology and payment operations in their localities.

As for credit institutions, the SBV required: Applying monetary, credit and foreign exchange solutions; restructuring operations and handling bad debts; strengthening internal inspection, supervision and audit; improving risk management and governance; preventing acts of violation in the banking sector; developing modern payment services; accelerating digital transformation in banking operations; and ensuring security of information technology and payment system.

The SBV Governor requested leaders of SBV units, SBV local branches, presidents and general directors of credit institutions, foreign bank branches to be responsible for executing this Directive.

Source: Vietnam Business Forum