Tay Ninh Banking Sector Helping to Rein in Inflation and Stabilise Macro-economy

Since early this year, with the prediction of challenges and difficulties of the economy, the Government promulgated some resolutions about crucial solutions to manage and implement social - economic development plans. According to Government’s resolutions, State Bank of Vietnam has carried out and effectively implemented solutions about inflation, stabilising the macro-economy, focusing on removing difficulties on business activities, and maintaining reasonable economic growth levels according to Government’s direction.

 

In Tay Ninh province, the banking sector has realised these solutions effectively. Particularly, Tay Ninh banking sector decreased its deposit rate twice, from eight percent to seven percent. So, the ceiling credit interest rate for five privileged sectors (agricultural - rural, export, small and medium enterprises, supportive industry and high technology enterprises) is nine percent annually. General deposit interest rate decreased 2 - 3 percent annually and credit interest rate decreased 3 - 5 percent annually compared to the beginning of the year; such interest rates turned into the same level of that in the period of 2005 - 2006.

 

Furthermore, the banking sector also realised the exemption and reduction of credit rate, reduced credit rate, revised to restructure effective credits. Currently, Tay Ninh banking sector has restructured its debts, realised credit rate reduction for 10,747 customers with total credit of VND1,201.8 billion. Provincial banks also arranged meetings with customers to figure out the mechanism, interest rate policy, credit and understanding customers to help them remove difficulties and improve credit growth. They also facilitate customers by enhancing advertisement, meeting with customers, posting procedures and application of the loans in transaction offices and People’s Committee of communes for people to know and realise.

 

Sharing difficulties in capital mobilisation, Mr Nguyen Tien Phuc, Director of Tay Ninh province branch of State Bank said that Tay Ninh is an agriculture province, people’s incomes are still low, therefore capital mobilisation of credit institutions is a hard task. In 2013 alone, apart from continuously decreasing deposit interest rates, (current interest rates are at the lowest level in the last 5 years), other factors limiting capital mobilisation are enterprises’ large inventories, sharp decline in prices of many trees, especially rubber trees. For the first 10 months of 2013, capital mobilisation increases more slowly over previous years; capital mobilisation of 2013 goes up 6.5 percent over that of 2012. However, credit still grows gradually, the growth rate of 2013 for the first 10 months is higher than that in the same period of 2012 and completes the targets planned at the beginning of the year.

 

According to Mr Phuc, based on credit growth target of 2013 of about 12 percent, the State Bank has flexibly elaborated credit solutions in direction of expanding credit while ensuring security of credit institutions, handling difficulties in credit relationship between customers and credit institutions. In October 2013, the State Bank issued documents directing credit institutions to continue solving problems related to conditions and procedures of granting loans.

 

In Tay Ninh province, the banking system will comply with general directions of the State Bank to support effective enterprises in difficulty. At the same time, the province will also direct credit institutions to frequently meet customers to answer inquiries on interest rate policies, identify difficulties and support customers in planning. The provincial banking system aspires to increase capital mobilisation by 8 percent from 2013, credit growth rate by 12 percent; and bad debts over total debts by 3 percent.