Chủ đề: credit institutions

It has been forecast that the bad debt ratio in the banking system may increase in the near future as Covid-19 is still to be brought under control. While waiting for the Law on Handling Bad Debts of Credit Institutions to be developed, the State Bank of Vietnam (SBV) has proposed extending the application period in Resolution No. 42, on handling the bad debts of credit institutions, by three years, to August 15, 2025. Resolution No. 42 from the National Assembly is valid for five years from August 15, 2017.

Credit institutions are expected to “slightly loosen” overall credit standards this year and focus on priority sectors and industries such as wholesale, retail, import and export, construction, and consumer lending, while tightening them on “high-risk” sectors such as securities and real estate.

At an online discussion at the National Assembly’s extra-ordinary session on January 7 on the draft Resolution on fiscal and monetary policies to support the socio-economic recovery and development program, State Bank of Vietnam (SBV) Governor Nguyen Thi Hong said that, under the law, the central bank cannot force credit institutions to reduce profits to cut interest rate costs, and that it will flexibly use other tools such as reserve requirements.

Investment and development funds in Vietnam to access many advantages under French Development Agency and Association of Development Financing Institutions in Asia and the Pacific program.

The State Bank of Vietnam and credit institutions have actively promoted solutions to help enterprises overcome the impact of Covid-19 since it first broke out in the country. The accumulated amount of interest exemptions and reductions for enterprises from January 23, 2020 to June 14, 2021 is VND18.27 trillion ($793.6 million). Such exemptions and reductions are expected to continue to rise.