Mr. Pham Ba Nam, Director of the Provincial Branch State Bank
According to Mr. Pham Ba Nam, in the past two years, the COVID-19 pandemic has cast a dark shadow over the economic picture. To implement the "dual target" of both pandemic prevention and economic development, with the spirit of making efforts, sharing all difficulties, accompanying businesses and people, in recent times, the banking sector has implemented many policies and solutions to support customers damaged by the pandemic and contribute to the economic recovery in line with the local situation.
Is the interest rate reduction among the positive solutions the banking sector has implemented, sir?
Shortly after the pandemic outbreak in 2020, the SB reduced the operating interest rate 3 times with a 1.5 - 2% fall a year. In 2021, the SB maintained these low interest rates, combined ample liquidity management in the monetary market with a corresponding reduction in the average VND deposit and lending interest rates of credit institutions (CIs) at about 0.51% a year and 0.81% a year against late 2020 after a reduction of about 1% a year in 2020. The average loan interest rate for priority areas according to the Government policy is 4.3% a year (lower than the stipulated cap of 4.5% a year).
What about the policy of extending, reducing interest on existing loans?
The CIs in the province have also carried out debt restructuring solutions, loan interest exemption and reduction, kept the debt group unchanged in accordance with Circular 01/2020/TT-NHNN and the amended and supplemented circulars. Currently, there are 6 commercial bank (CB) branches that agree to reduce interest rates from 0.5% to 1.5% for existing loans from July 15, 2021 to the end of 2021.
CB branches and the people's credit funds (PCFs) restructured debt repayment terms for 1,938 customers with a structured loan balance of VND 1,728 billion, exempted, reduced and lowered interest rates for 51,781 customers with a total outstanding balance of VND 24,784 billion. The amount of interest granted exemption, reduction or lowering from interest rates was VND 74.87 billion.
The Provincial Bank for Social Policies (BSP) also extended the debt for 1,124 customers entitled to debt extension with a total outstanding balance of VND 22.4 billion.
Capital is seen as the driver for enterprises to invest and recover economy. So how are the new policies for loan support implemented?
In 2021, CIs provided new loans to restore production for 7,045 customers (including 670 enterprises) with a loan turnover of VND 38,702 billion from the time the pandemic was announced to the end of 2021. During the year, the total credit balance of CIs in the province reached VND 63,287 billion, up over 22% against late 2020 (equivalent to an increase of VND 11,420 billion). This is quite a high growth against the past 5 years.
Agribank has implemented the customer support package since early 2022
Concurrently, BSP implemented a loan program for salary payment due to working stopfor the employees of 2 enterprises with a loan turnover of VND 444 million and the paid number of employees of 219 people. BSP provided the employee users with a loan to pay salary for work stop, to pay salary for production rebound for 5 enterprises with a capital of VND 1,491 million and the paid number of employees of 466.
In early 2022, CIs strongly implement many preferential, flexible credit programs suitable for all customers, mainly in 5 priority areas. The attractive short-term working capital loan interest rate is from 4.0% per year for customers with viable business plan and quick capital turnover. In 2022, with the credit growth target of 14% per year across the province, equivalent to a net increase of nearly VND 9,000 billion, I believe this is a strong driving force behind the province's economic development.
The above financial solutions contributed significantly to the local economic growth in the past year. With the target of accompanying the locality and businesses for economic rebound, what orientations does the banking sector have to support the people and businesses in removing difficulties?
The Provincial Branch State Bank will continue to operate the monetary policy towards flexibility, creating maximum conditions to support businesses and support liquidity for the economy. In operating monetary policy, the branch will closely follow the operation of the SB, the economic rebound and development program of the Government and the province in order to realize the goal of accompanying the locality in economic recovery and development.
Notably, the branch continues to earmark capital for businesses, especially supporting businesses facing difficulties due to the COVID-19 pandemic. It directs cash flows to prior areas under the guidance of the Government, facilitating maximum exploitation of resources in the economy through CIs to contribute to implementing the national target programs, preferential credit programs under the guidance of the Government at present.
As the "lifeblood" of the economy, from now on the banking sector actively prepares the adaptation plans in readiness to help enterprises restore production.
What solutions will the State Bank carry out to continue accompanying in the economic recovery?
In 2022, the State Bank provincial branch will direct CIs to safe and effective credit growth, direct credit to production and business areas, priority areas in accordance with the Government's policy. It will provide loans to meet life need, consumer credit at a reasonable interest rate, ensure loan safety, comply with the relevant legal stipulations, support the socio-economic rebound and development and not loosen credit terms.
The Provincial Branch State Bank made timely recommendations to the Provincial Party Committee, the Provincial People's Committee on the measures to manage the operation of CIs and PCFs, the solutions to problems relevant to the monetary and banking areas. It proactively prevents legal violations in banking and restructures credit CIs in association with bad debt handling acceleration. Simultaneously, it will be the starting point for boosting digital transformation in banking activities in association with non-cash payment promotion.
Thank you, sir!
By HOANG LOAN