State Bank of Vietnam requests to strengthen credit operations and implement debts restructuring policy

The Directive states that, recently, the socio-economic development of Vietnam, one of the most open economies in the world, was significantly impacted by complicated developments over the world as more difficulties and challenges arose, global production, business, investment, and consumption activities slowed down and low growth coupled with the risk of recession in some economies. Accordingly, the GDP growth in the first quarter was only 3.32%, almost the lowest compared to the same period since 2011, due to the decline in global demand and weak domestic demand. In addition, people and businesses faced difficulties in production and business activities such as lack of orders and output markets, leading to a decrease in revenue and income, affecting the ability to repay loans at credit institutions and foreign bank branches.

In that context, credit institutions have proactively adopted many policies and solutions to support people and businesses in difficulties in the spirit of sharing and companionship: With the tradition and policy of supporting people and businesses during the recent Covid-19 pandemic, according to Resolution No. 50/NQ-CP dated April 8, 2023, Resolution No. 59/NQ-CP dated April 23, 2023, of the Government, the Governor of the SBV issued Circular No. 02/2023/TT-NHNN dated April 23, 2023, stipulating that credit institutions and foreign bank branches restructure debt repayment terms and maintain debt classifications to support customers facing difficulties in production and business activities and customers facing difficulties in repaying loans to serve the daily needs and consumption. Furthermore, on April 25, 2023, the SBV held a conference on credit operations and the implementation of Circular No. 02/2023/TT-NHNN with the participation of SBV branches, credit institutions, and foreign bank branches in 63 provinces and cities to evaluate the credit operations in the first months of 2023 and orient the implementation in the coming time, at the same time widely inform about the content of supporting policies to reduce difficulties for customers according to Circular No. 02/2023/TT-NHNN.

To achieve the goals set at the beginning of the year and effectively implement Circular No. 02/2023/TT-NHNN, the Governor of the SBV requested its units, credit institutions, and associations in the industry expeditiously, decisively, and effectively perform the key tasks.

The Governor requested the best effort from SBV's units and credit institutions to achieve the objectives set in Directive No. 01/CT-NHNN dated January 17, 2023, of the Governor of the SBV; focus on implementing solutions to control inflation, maintain the stability of the currency and foreign exchange markets, and stabilize the macro-economy; mobilize credit on priority areas, production and business sectors and growth engines to promptly meet the capital needs of people and businesses, contributing to the recovery and development of production and business; continue to reform administrative procedures, improve access to credit capital, and cut costs to further reduce lending interest rates.

Relevant units need to actively implement the policy of rescheduling debt payment and maintaining the debt classifications according to Circular No. 02/2023/TT-NHNN synchronously and consistently from the central to local levels, from the SBV to credit institutions, from the headquarters to branches, transaction offices of credit institutions; ensure the close and timely coordination between the SBV and credit institutions and the unanimity cooperation of borrowers to improve the effectiveness of policy implementation.

Relevant units also need to ensure compliance with current legal regulations on lending activities of credit institutions to customers, regulations on rescheduling debt payment and maintaining the debt classifications according to Circular No. 02/2023/TT-NHNN of the SBV and other relevant laws; and ensure credit quality and the objectivity and true nature of bad debts.

The Governor also requested SBV's units to continue to advise and effectively implement solutions for monetary policy, credit, interest rates, etc., according to the tasks assigned in Directive No. 01/CT-NHNN dated January 17, 2023, of the Governor of the SBV on the implementation of key tasks of the banking industry in 2023.

At the same time, SBV's units need to continue to coordinate with ministries, sectors, localities, industry associations, and businesses to continue promoting the implementation of the Bank-enterprise connection program and thematic credit conferences; continue to advise and promote the implementation of tasks of the banking sector in the program of socio-economic recovery and development, including the policy of 2% supporting interest rate for enterprises, cooperatives, household business.

Regarding the implementation of Circular No. 02/2023/TT-NHNN, SBV's units monitor the implementation of the policy of rescheduling debt payment and maintaining the debt classifications to support customers facing difficulties of credit institutions; regularly report to the SBV's Board of Directors on implementation results; promptly propose solutions to handle the challenges and problems arising in the implementation process; inspect and supervise the rescheduling debt payment and maintaining the debt classifications to support customers in difficulties of credit institutions according to regulations; strengthen communication on the policy of rescheduling debt payment and maintaining the debt classifications to support customers in difficulty, help people and businesses to understand and access information about the policy early.

For SBV's branches in municipalities, the Governor requested to direct credit institutions and branches of credit institutions in the locality to step up the implementation of Directive No. 01/CT-NHNN dated January 17, 2023, of the Governor of the SBV on the implementation of key tasks of the banking sector in 2023; actively implement credit programs and policies under the direction of the Government and the Prime Minister for sectors and fields, a credit package of VND 120,000 billion for investors and homebuyers of social housing and worker housing projects, old apartment renovating and rebuilding projects according to Resolution No. 33/NQ-CP dated March 11, 2023, of the Government; and continue to drastically implement the interest rate support program from the state budget for loans of enterprises, cooperatives, and business households according to Decree No. 31/2022/ND-CP, without any enterprises, cooperatives, or business households that are subject to interest rate support and have needs not supported promptly.

Regarding the implementation of Circular No. 02/2023/TT-NHNN, the SBV's branches in provinces and municipalities direct credit institutions and branches of credit institutions in the area to strictly implement the policy of rescheduling debt payment and maintaining the debt classifications to support customers in difficulty as prescribed in Circular No. 02/2023/TT-NHNN. In addition, coordinating with media agencies, departments, branches, socio-political organizations, associations, and credit institutions in the area to strengthen information and communication on the policy of rescheduling debt payment and maintaining the debt classifications; promoting the implementation of activities to connect banks - businesses to improve the efficiency of policy implementation.

SBV's branches are directed to inspect and supervise the observance of regulations on rescheduling debt payment and maintaining the debt classifications in the locality; take measures to strictly and promptly handle cases of non-compliance with the Government's guidelines and regulations of the SBV, evading, slow handling, deliberately causing difficulties and troubles, refusing to restructure the debt repayment term and maintain the debt classifications of customers who meet all conditions; simultaneously supervise, monitor, and handle cases of taking advantage of the rescheduling debt payment and maintaining the debt classifications policy for gain.

SBV's branches are also directed to monitor the process and results of rescheduling debt payment and maintaining the debt classifications of credit institutions and branches of credit institutions in the locality, report to the SBV according to regulations. On the other hand, they are also directed to continue to monitor, collect information, and evaluate the difficulties of people and businesses in the area and the results of implementing the policy of rescheduling debt payment and maintaining the debt classifications in the locality to coordinate with relevant agencies to solve difficulties and problems according to their authority; promptly report and propose to the People's Committees of provinces and cities and the Governor of the SBV to take measures to deal with problems arising beyond their authority.

For credit institutions, the Governor requested to continue effectively implementing Directive No. 01/CT-NHNN dated January 17, 2023, of the Governor of the SBV on the implementation of key tasks of the banking industry in 2023, which focuses on implementing safe and effective credit growth solutions, improving credit quality, controlling and handling bad debts and continuing to reduce costs to lower lending interest rates and reduce fees to support businesses and people to recover and develop production and business.

Credit institutions are directed to actively implement credit programs and policies for a number of industries and fields under the direction of the Government and the Prime Minister, including a credit package of VND 120,000 billion for investors and homebuyers of social housing and worker housing projects, old apartment renovating and rebuilding projects according to Resolution No. 33/NQ-CP dated March 11, 2023, of the Government; implement the interest rate support program with the utmost determination from the state budget for loans of enterprises, cooperatives and business households according to Decree No. 31/2022/ND-CP, without any enterprises, cooperatives, business households that are subject to interest rate support and have needs not supported promptly and promoting the effective implementation of the program to connect banks - businesses; and promptly implement solutions to remove difficulties and create favorable conditions for people and businesses to access credit capital.

Regarding implementing Circular No. 02/2023/TT-NHNN, credit institutions urgently promulgate and immediately implement internal regulations on rescheduling debt payment and maintaining the debt classifications as prescribed in Circular No. 02/ 2023/TT-NHNN. It is strictly forbidden to cause difficulties or troubles or to issue additional conditions and procedures other than those specified in Circular No. 02/2023/TT-NHNN.

The Chairman of the Members' Council/Board of Directors and the General Director of the credit institutions directly direct the implementation of the rescheduling debt payment and maintaining the debt classifications according to Circular 02/2023/TT-NHNN and is accountable to the Governor of the SBV for implementation results; and take measures to strictly handle units and individuals that implement slowly, deliberately cause difficulties, irresponsibly, and do not comply with regulations.

In addition, credit institutions are also directed to promote communication and publicity about documents and procedures of the policy of rescheduling debt payment and maintaining the debt classifications so that customers can grasp information, understand correctly and thoroughly the policy, promptly solve problems related to documents and procedures for customers, creating favorable conditions to support customers to complete dossiers to get early access to support policies.

Credit institutions are also directed to implement the policy of rescheduling debt payment and maintaining the debt classifications in accordance with regulations; closely and safely supervise, prevent, and stop any actions of taking advantage of rescheduling debt payment and maintaining the debt classifications policy for personal gain; classify debts, make provisions for risks, and record accrued interest in accordance with the law; report timely and fully the results of rescheduling debt payment and maintaining the debt classifications in accordance with regulations and guidance of the SBV; proactively handle difficulties and problems in the system and promptly reporting and proposing to the SBV, ministries, branches, and People's Committees of provinces and cities to take measures to handle difficulties and problems beyond their authority during the implementation process.

For associations in the banking sector, the Governor requested to continue promoting the role of connecting credit institutions, creating consensus and unification among member credit institutions in the implementation of credit programs and policies and solutions to remove difficulties for people and businesses in accessing credit capital to restore and develop production and business, contributing to economic development; mobilize credit institutions to reduce lending rates and share profits with customers' difficulties and timely reporting of challenges and problems of credit institutions during policy implementation to state agencies for timely handling.

This Directive is effective from the date of signing.