|The State Bank of Vietnam plans to further promote the implementation of a project on restructuring the credit institution system in association with bad debt settlements by 2020. (Illustrative photo: VOV)
The State Bank of Vietnam (SBV) made the statement in a report highlighting the outstanding outcomes that the banking sector has achieved during the six-month period.
Pham Thanh Ha, head of the SBV’s Monetary Policy Department, said that the six-month credit was poured into prioritized production and business fields as directed by the Government, whilst that for risky business fields was tightly controlled. Deposit and lending rates remained stable, with annual short-term lending rates ranging from 6 - 9 per cent and medium and long-term ones at 9 - 11 per cent.
Ha noted that the central bank will continue to regulate monetary policy in a harmonious and prudent manner while seeking to refinance enterprises in line with the Government's guidance. “A synchronous combination of tools and measures to intervene the foreign exchange market will be deployed if needed”.
The SBV has taken over solutions to synchronously handle bad debts in line with those aimed to exert the control of newly arising bad debts, thus helping to improve credit quality and curb the bad debt ratio of the credit institution system.
Nguyen Trong Du, deputy chief inspector of the SBV Banking Supervision Agency, reported that the entire credit institution system settled VND907.330 trillion (US$39.01 billion) worth of bad debts from 2012 to the end of March 2019.
In 2018 alone, as many as VND163.140 trillion (US$7.01 billion) of bad debts were handled. The internal bad debt ratio stood at 2.02 per cent by late March 2019, Du added.
In the coming time, the central bank will increasingly supervise the implementation of the National Assembly’s Resolution No.42 on the pilot settlement of bad debts for credit institutions. Specific focus will be placed on inspecting credit institutions whose bad debt settlements have not significantly improved, the inspector unveiled.
Pham Tien Dung, head of the SBV Payment Department, said that the central bank made great attempts to perfect the legal framework and implement a comprehensive range of solutions to accelerate cashless payments.
The number of transactions made through the inter-bank e-payment system reached 64.16 million during the first five months of 2019, with the total value of VND35.728 quadrillion (US$1.53 trillion).
The central bank looks to further promote the implementation of a project on restructuring the credit institution system in association with bad debt settlements by 2020.
Focus is to be placed on effectively handling poor-performing credit institutions, speeding up the handling of bad debts under market mechanisms, tightening control of newly arising bad debts, and slashing the internal bad debt ratio to below 2 per cent.