This strategic decision has been made in response to proposals from the CIs themselves, based on a comprehensive evaluation of their operating conditions, financial strength, governance efficiency, and potential for sustainable credit expansion.

The main goal behind this shift is to safeguard the liquidity and operational safety of the entire CI system. Each CI has received specific targets in line with this overarching plan.

In relation to its objectives for 2023, the SBV stated that following the economic growth and inflation targets established by the National Assembly and the government, it has set a preliminary credit growth target for 2023 of around 14-15 per cent. This rate is open to adjustments in line with real-world economic developments.

Amidst an economic growth rate in the first half of the year that fell short of projections, and the difficulties encountered by the principal sources of economic capital, the SBV has recalibrated the credit growth target with an eye on fuelling the economy with additional credit capital – while also remaining mindful of potential inflation risks.

Along with the release of the revised credit growth figures, the SBV has issued a two-pronged directive to the CIs.

Firstly, they are urged to rigorously implement Directive No.01/CT-NHNN issued on January 17, by the SBV's Governor. This concerns the priority tasks for the banking sector in 2023, with a particular focus on potent measures to invigorate safe and efficient credit growth.

The directive calls for an enhancement of credit quality and advocates steering credit towards sectors that are productive and business-centric. This strategy aligns with the government's policy and seeks to meet the capital requirements of enterprises and the public in a timely fashion.

Secondly, the SBV has instructed the CIs to streamline and reduce administrative procedures, simplify and expedite loan processes, and ensure comprehensive legal compliance. The aim is to make it easier for customers to access bank credit, providing a vital boost for businesses and individuals alike in their efforts to revitalise production and business activities, whilst also securing the robust operation of the CIs.

In its forward-looking statement, the SBV has committed to maintaining a close watch on domestic and international market fluctuations. It stands ready to provide liquidity support and enable the CIs to effectively meet the credit demands of the economy.

At the same time, the SBV will continue to review credit growth across the system towards the end of the year and calibrate its management strategies accordingly.

In an interview with local media on July 10, the CEO of a joint-stock bank headquartered in Ho Chi Minh City, revealed that the SBV has just allowed it a credit growth increase of 150 per cent compared to the beginning of the year.

Meanwhile, a leader of another bank in Ho Chi Minh City also mentioned the SBV's move to enlarge its credit room. The executive did not disclose the specific figures but noted that the growth rate varies depending on the credit quality and the assets of each bank.

As of the end of June, credit across the entire system has only increased by 4.73 per cent, equal to one-third of the planned target.