The State Bank of Vietnam Actively Pursues Measures to Restore Saigon Commercial Joint Stock Bank Operations

At the State Bank's inaugural press conference for the first quarter of 2024 in Hanoi on April 19, Deputy Governor Dao Minh Tu unveiled the institution's proactive strategy to facilitate the gradual recovery of Saigon Commercial Joint Stock Bank (SCB).

Emphasizing the imperative of timely interventions to safeguard the stability of the national financial system, Mr. Tu underscored the State Bank's commitment to navigating SCB's challenges.

"The supply of money, whether abundant or scarce, has tools to regulate the amount of money provided through lending to SCB or refinancing tasks, lending tasks to normal commercial banks today," Mr. Tu said. "When we see that there is a lot of money in the economy and there is a surplus, there are immediate measures." 

Mr. Tu recounted SCB's liquidity crisis in October 2023, a period that triggered regulatory mechanisms aimed at stabilizing the bank. He highlighted that while SCB's situation is not unique, the State Bank is cognizant of the need for robust policy solutions to ensure operational stability and systemic resilience.

Despite SCB's substantial assets, Mr. Tu reiterated the urgency of restructuring efforts, affirming the State Bank's active pursuit of mechanisms to facilitate SCB's gradual return to normalcy.

He assured stakeholders that support measures, including loans and regulatory interventions, are meticulously implemented in accordance with legal provisions to ensure systemic stability.

In addition to addressing SCB's challenges, Mr. Tu provided insights into broader macroeconomic policies. He noted a positive uptick in credit growth after seasonal fluctuations in the initial months of 2024.

The State Bank's commitment to a proactive and flexible monetary policy, aligned with fiscal and macroeconomic objectives, underscores its role in supporting economic recovery and maintaining stable financial markets.

Maintaining interest rates unchanged, facilitating access to capital for credit institutions, and encouraging reduced lending rates reflect the State Bank's multifaceted approach to stimulate economic activity. Mr. Tu highlighted the decline in deposit and lending interest rates, signaling favorable conditions for borrowers and businesses.

Looking ahead, the State Bank remains steadfast in its commitment to managing interest rates, exchange rate stability, and prudent credit growth. These efforts aim to foster macroeconomic stability, support economic growth, and ensure the safety and resilience of Vietnam's financial system in the face of evolving market dynamics.