The State Bank of Vietnam continues to support credit to meet business capital needs, while taking inflation risks into account.
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Directive No. 01 dated January 17, 2023 of the State Bank of Vietnam (BEV) on the key tasks of the banking sector clearly spells out the rational management of volume growth and credit structure, meeting the demand for capital in order to control inflation and sustain growth. According to calculations, regarding 1.3 to 1.5 trillion VND (63 billion USD) will be allocated by the banking system in 2023 to support growth.
| Commercial banks massively reduce the interest rate on loans to support trade and production. |
| Photo : VNA/CVN |
“The BEV will continue to pursue a firm, flexible, effective and timely monetary policy, to identify and assess the difficulties and obstacles from the beginning of the year in order to take effective and appropriate measures, this to ensure the objective controlling inflation, stabilizing the dong and macroeconomic foundations, and supporting economic growth”, declared the vice-governor of the BEV, Dao Minh Tu.
Seven key tasks to complete
In 2023, the banking sector will continue to accelerate the implementation of its tasks under the socio-economic recovery and development program and national target programs, focus on the deployment of the 2% interest under Decree No31/2022 from the government and credit programs through the Social Policy Bank. In addition, lending activities of credit institutions are closely supervised, ensuring capital flows directed to production and business and priority areas. The granting of credit is primarily aimed at social housing projects serving low-income workers… Under a decree recently published by the BEV, the banking sector will focus this year on seven key tasks.
First, to manage monetary policy in a firm, proactive, flexible and effective manner within the framework of fiscal policy and other macroeconomic policies in order to control inflation at around 4.5%, contributing to stabilizing the macroeconomy and supporting the economic growth. Credit growth in 2023 is expected at 14-15% and may be adjusted depending on the actual situation.
Second, reasonably control credit growth to limit inflation and support economic development. Credit should favor production and trade activities for growth.
Third, the master plan for the restructuring of credit institutions is effectively implemented as part of the treatment of bad debts over the period 2021-2025.
Fourth, promote cashless payments and digital transformation in banking operations while ensuring security and safety.
Fifth, focus on building and completing related mechanisms and policies and improving the efficiency and effectiveness of management tasks and law enforcement in banking operations.
Sixth, simplify administrative procedures and improve the business and investment environment to create the best possible conditions for businesses and individuals.
And finally, continue to effectively implement the banking sector development strategy by 2025 and by 2030.
Loans at preferential interest rates
Several banks granted loans at preferential interest rates to their customers, reducing loans to production and trade activities by 0.5 to 3% per year, including in the real estate market.
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| Companies need capital to develop and expand their production. |
| Photo : VNA/CVN |
The Bank for Agriculture and Rural Development (Agribank) has announced that home loans can qualify for an interest rate reduction of up to 3%/year from prevailing interest rates. This year, Agribank will spend more than 100 trillion VND (4 billion USD)
to provide preferential loans to companies, importers and exporters, clients in the health and education sector.
The Vietnam Foreign Trade Joint-Stock Commercial Bank (Vietcombank), Vietnam Industry and Commerce Joint-Stock Commercial Bank (Vietinbank), Vietnam Investment and Development Bank (BIDV) also offer attractive interest rates. BIDV will grant up to 4.1 billion USD in individual loans for the purchase of homes, cars, etc. Customers will benefit from preferential interest rates starting from 8%/year for loans of less than 6 months , from 9%/year for those of 6 to 12 months, and from 10.3%/year for loans over 12 months.
From January 1 to April 30, Vietcombank has pledged to reduce interest rates by 0.5%/year for individuals and organizations that have taken out loans, except for customers operating in risky areas. such as real estate or stock markets. Vietinbank also offers credit of USD 400 million at preferential interest rate of 7%/annum for loans with tenors up to 6 months for new loans by June 30, 2023. This program is applies to small and medium enterprises that are new customers.
Other banks have extended the granting of these loans at reasonable rates to other sectors. Thus, at the Joint-Stock Army Commercial Bank (MB Bank), a reduction of 1%/year in these interest rates is granted to all companies with a turnover of less than 100 billion VND (4 million USD). The Joint-Stock Commercial Bank of Technology and Commerce (Techcombank) announced an envelope of 1.2 million USD at an interest rate of 2% for import-export activities.
THE LINH/CVN