Mr. Dao Minh Tu

Could you tell me how the policies to support the interest rate of 2% a year are being implemented?

Supporting the economic recovery after the severe effects of the Covid-19 pandemic, the National Assembly issued Resolution No. 43/2022/QH15 dated January 11, 2022 on fiscal and monetary policies to support the Program of socio-economic recovery and development. Pursuant to Resolution No. 43/2022/QH15, the Government issued Resolution No. 11/NQ-CP dated January 30, 2022 on the program of socio-economic recovery and development and implementation of Resolution No. 43. /2022/QH15 of the National Assembly on fiscal and monetary policies to support the program, including the policy of supporting interest rates of 2% ayear, up to a maximum of VND 40,000 billion through the system of commercial banks for businesses enterprises, cooperatives and business households in a number of industries and fields.

On May 20, 2022, the Government issued Decree No. 31/2022/ND-CP on interest rate support from the state budget for loans of enterprises, cooperatives and business households. On the same day, the Governor of the SBV also issued Circular No. 03/2022/TT-NHNN guiding commercial banks to implement interest rate support according to the Government's Decree.

This is a policy that has been highly anticipated by the business community and business households. The point of view of the Government and the State Bank is to put support policies into practice soon, with the goal of helping businesses, cooperatives, business households have access to bank capital with lower interest rates to overcome difficulties, stabilize and develop production and business, creating a foundation and driving force for economic development; at the same time, ensure the principles of fairness, publicity and transparency, identify the right beneficiaries, minimize mistakes during the implementation and settlement of interest rate support.

The 2% a year interest rate support will affect the total credit of the whole economy as well as the growth limit of each bank. How will the State Bank of Vietnam handle it, sir?

Since the beginning of the year, after having coordinated to develop a mechanism to implement interest rate support policies, the State Bank has identified bank capital as an important channel to supply capital for the economy and businesses to focus on to support the fastest and most effective economic recovery tasks. Therefore, the State Bank always directs commercial banks to expand credit, but must direct credit to all key areas, requiring more focus to recover quickly. Therefore, credit by the end of May has increased by 7.75% compared to the beginning of 2022. Credit levels in general and in many fields compared to this time in 2021, most of them will double.

Credit increased sharply, but it was spread across all the necessary fields and areas that should be prioritized according to the Government's policy. For example, the agricultural and rural sector will increase 2.3 times over the same period in 2021. Industry, trade, services, traffic, transportation, customers and restaurants have a growth rate of up to 8.24% - almost double 2021. These are positive signs that these industries and sectors have recovered and credit is on the right track. In addition, banks boosted credit with solutions such as debt deferral, debt restructuring, interest rate reduction, etc., thus contributing to achieving the set targets of macroeconomic development.

Given that situation, the implementation of the 2% a year interest rate support package will certainly increase credit demand, increase credit volume than before, not to mention additional compensation for temporary effects capital from corporate bonds. Therefore, the State Bank has calculated and researched to have an appropriate amount of additional credit to meet the needs of economic recovery, so that the 2% a year package has enough credit space. However, the State Bank always adheres to the principle of credit management on the basis of inflation control and macroeconomic indicators.

Not only in terms of total credit demand in general, many commercial banks are also proposing to increase the credit growth limit (room) to deploy the support package. This has also been taken into account by the State Bank and will be considered and calculated in the management to come up with an appropriate room level, meeting the objectives in the overall relationship of the macro-economy.

In order to access low-interest capital from this support policy, could you tell me what measures the SBV will take to ensure safe and correct loan and disbursement?

As I said above, the task of the banking industry must be to manage and deploy the 2% a year interest rate support to the right subjects, according to regulations, transparently, clearly, not to profit policy.

Accordingly, Circular 03 of the State Bank clearly stipulates the levels of responsibility, including the responsibilities of local agencies in handling policy violations, it can proceed with loan recovery if it is determined that enterprises, business households and cooperatives borrow capital but use the capital for improper purposes. During the implementation process, the SBV will send inspection and supervision teams as well as coordinate with the auditing agencies and the State Audit so that the implementation process of credit institutions can achieve the set targets.

In addition, the State Bank also directed commercial banks not to lower credit standards, to ensure the implementation of interest rate support in accordance with regulations and right subjects. This is the policy of the Government, the Ministry of Finance takes care of budget issues, the Ministry of Planning and Investment regulates beneficiaries, and provides support through the commercial banking system. Therefore, the initial implementation may cause confusion and inconsistency so ministries and branches need to actively coordinate to resolve early to avoid bottlenecks for capital.

Thank you Sir!