Mr. Le Viet Sy, Deputy Director in charge of the State Bank's Provincial Branch

According to Mr. Sy, in order to support the businesses, people and economy, in 2020 and 8 months of 2021, the State Bank proactively and flexibly operated the monetary policy, closely monitored the macroeconomic developments and actual situation in order to make timely and appropriate decisions.

Regarding the interest rate, the SB synchronously reduced the operating interest rates three times on a large scale (1.5-2.0% per year), concurrently took measures to direct, operate and call upon the credit institutions (CIs) to reduce the lending interest rates.

Regarding the mechanism, the SB issued Circular 01, Circular 03 and recently Circular 14 in order to provide a legal basis for CIs to restructure debt repayment terms, exempt or reduce interest and fees, and keep debt group unchanged to support the customers hit by the COVID-19 pandemic, and concurrently direct CIs and payment organizations to exempt and reduce banking service fees

Aside from restructuring the due debts without transferring groups of businesses, the reduction of interest on existing outstanding loans and new loans is also very practical.

Could you please tell us about the initial results of the banking sector's support for the provincial people and businesses?

According to the survey results, the total outstanding loans hit by the COVID-19 pandemic currently are VND 13,266 billion (of which businesses are VND 9,597.8 billion, accounting for 72%). The banking sector restructured the debt repayment term and kept the debt group unchanged for 1,035 customers (including 144 businesses) with a total value of structured original debt and interest of VND 1,390 billion (of which businesses are VND 1,123 billion).

The CIs also exempted, reduced the interest rates for 3,624 customers (including 227 businesses) with a total outstanding loans of VND 3,309 billion (of which businesses are VND 2,216 billion). The amount of interest from exemption, reduction or interest rate decrease is VND 9.74 billion (of which businesses are VND 6.28 billion)…

The banks still implement the preferential credit programs

The business community holds great expectations for the policy of lending to pay the work cessation salary, which is being implemented. However, according to the business community, the accompanying regulations remain very difficult to access.

Thanks to this policy, the eligible businesses will be able to borrow capital at an interest rate of 0% per year without loan security measures taken; this is a very open policy. Currently, the SB also proposes relaxing some regulations. Hopefully, in the future, more businesses will get access to this policy package.

The SB Provincial Branch is closely monitoring and directing Vietnam Bank for Social Policies to drastically implement this policy. The SB of Vietnam also issued Circular No. 10/2021/TT-NHNN dated July 21, 2021 to re-capitalize Vietnam Bank for Social Policies VND 7,500 billion with 0% interest rate as a loan capital source. Therefore, the loan capital source remains very plentiful.

How is the cut in interest rates on new loans for customers made by CIs?

Over the past time, the SB of Vietnam has reduced the operating interest rate three times with a total reduction of 1.5% to 2.0% per year in order to make it easy for the CIs to access low-cost capital from the SB, enabling the loan interest rate reduction.

Therefore, the capital of commercial banks is now quite abundant plus the lower interest rate mostly from 0.5%-2.5% per year against before the pandemic. The opportunity for lending at reduced lending interest rates stays plentiful.

Currently, 16 commercial banks with a large credit market share agree to reduce the lending interest rates for existing outstanding loans at a reduction rate of 0.5%-1.5% applied from July 15, 2021 to late 2021. With this interest rate reduction, the province will have 41,809 customers with outstanding loans supported in the interest rate reduction of VND 14,164 billion; the amount of interest reduced from July 15 to December 31, 2021 is VND 56.3 billion dong.

Simultaneously, the banks have launched many short-, medium- and long-term preferential credit programs targeting all customers, especially corporate customers.

Could you share your view with the businesses encountering difficulties caused by the COVID-19 pandemic?

In the coming time, in order to increase access to bank loans, aside from the solutions from the SB and CIs, businesses themselves need to restructure their operation, enhance their financial  capacity and repayment capacity, develop the plans and projects to use loans effectively, bolstering confidence for CIs to feel secure in granting credit.

Banks are also businesses, also hit by the COVID-19 pandemic, but in operation, they still have to ensure the effective use of capital and pay interest to depositors. When restructuring debts for customers according to Circular 01, Circular 03 and Circular 14, CIs also face many risks in the future and have to make provision for cost increase.

In addition, the banks have to cut salaries, bonuses, and minimize costs to have a source of support for exemption and reduction of interest, reduction of service fees, etc., whereby they show the sense of responsibility and accompany businesses. Therefore, the banking sector needs sympathy and sharing from all the levels and sectors, especially from the business community...

Thank you, sir.

Interview conducted by Hoang Loan