Efficient credit allocation is central to controlling inflation and ensuring banking system safety.

The country's lenders are at the vanguard of an ambitious plan to digitise the economy, but significant challenges still lie ahead.

The first quarter of 2024 paints a mixed picture for Vietnam's market, with profit growth tapering off amid lackluster performances from key sectors. While some industries show promise, others struggle to meet expectations, signaling potential challenges ahead.

The Vietnam Banks Association (VNBA) held a seminar on October 26 entitled “Opportunities and challenges to apply blockchain to operations in the banking and financial sector”. A representative from Vietcombank pointed out the many obstacles for banks in applying blockchain, including the high cost of research and infrastructure investment and the long period needed to synchronize transition with other systems. A TPBank representative said it is necessary for banks to pilot a sandbox to successfully apply blockchain.

The State Bank of Vietnam (SBV) has simultaneously increased the refinancing interest rate to 5 per cent per annum, the rediscount rate to 3.5 per cent per annum, the maximum interest rate for demand deposits and terms of less than one month to 0.5 per cent per annum, and term deposits from one month to less than six months to 5.0 per cent per annum. Rates on overnight loans in interbank electronic payments and loans from the SBV to cover capital shortfalls in clearing payments to credit institutions and foreign bank branches is 6.0 per cent per annum.

A resurgence in banking stocks over recent days helped the VN-Index climb to a new record in hitting 1,500 points. This shows that bad debts rising but kept under control has not affected banking stocks to any great extent and the expansion of credit would take them even higher.

Forum hears of the benefits to be had as Vietnam embraces the digitalization of its banking sector.

Vietnam’s banking system boasts abundant finances, allowing for support to be provided to economic recovery, according to the Bao Viet Securities Company (BVSC).

The professional reserve fund of Deposit Insurance of Vietnam currently stands at VND73.6 trillion ($3.23 billion). It contributes to the safety of the country’s banking and finance sector and is an important financial resource helping the agency better perform its functions and tasks.

Online forum looks at how digital transformation is taking root in banking and finance sector.