Banks cut interest rates for loans worth more than VND1.12 quadrillion (US$49 billion) of nearly 322,190 borrowers affected by the COVID-19 pandemic as of May 11, a State Bank of Vietnam (SBV) report showed.

Transactions at HD Bank (Source: VNA) 

The banks also extended debt payment deadlines for another 215,136 borrowers with total loans of nearly VND137.94 trillion.

New outstanding loans totalling nearly VND600 trillion with interest rate reductions of 0.5-2.5 percentage points per year were also offered to nearly 190,000 borrowers.

Of the total, the Vietnam Bank for Social Policies extended the debt payment deadline for VND3.65 trillion in loans of 141,909 borrowers and offered new preferential interest rate loans of VND21.2 trillion to 519,342 borrowers.

The SBV has also transferred VND16 trillion to the Vietnam Bank for Social Policies, so employers can borrow non-collateral loans with a zero percent interest rate to pay salaries to their employees who have been furloughed due to COVID-19. To apply for non-collateral and zero percent interest rate loans, employers must seek confirmation from local authorities.

According to SBV Deputy Governor Dao Minh Tu, it could take years to handle the aftermath of the coronavirus pandemic. He noted that many sectors, especially transport, tourism, imports and exports, will encounter both direct and indirect effects of the pandemic.

From the outset of the pandemic, the country’s banking sector has actively taken steps to evaluate it, predicted its impact and rolled out urgent measures to support affected enterprises and local residents.

The SBV in early March issued Circular No 1 and Directive No 2, guiding credit institutions to reschedule debts, waive or reduce lending rates and fees for loans and offer new loans to projects and enterprises that need further capital to maintain or resume their operations amid the social distancing period to stem the spread of the virus.

In addition, online payment services and cashless transactions have been promoted to assist people during the social-distancing time. The SBV and credit institutions have also waived and reduced payment fees to support people and businesses, up to a total value of some VND1 trillion.