Under the latest Directive of the State Bank of Vietnam, what are the 08 key tasks of the banking sector in 2024?
- What are the 08 key tasks of the banking sector in 2024 specified in the latest Directive of the State Bank of Vietnam?
- What are the directives on the operation of monetary, credit, foreign exchange, and gold policies in Vietnam?
- What are the directives on restructuring the system of credit institutions associated with bad debt settlement in Vietnam?
What are the 08 key tasks of the banking sector in 2024 specified in the latest Directive of the State Bank of Vietnam?
On January 15, 2024, the State Bank of Vietnam issued Directive 01/CT-NHNN 2024 on organizing the performance of key tasks of the banking sector in 2024.
Accordingly, in Directive 01/CT-NHNN 2024, the Governor of the State Bank of Vietnam requires units of the State Bank of Vietnam and credit institutions and branches of foreign banks (hereinafter referred to as credit institutions) to strictly take solutions to manage monetary policy and banking activities in 2024 to control inflation, contribute to macroeconomic stability, and support reasonable economic growth.
In which, there are 8 key tasks of the banking sector in 2024 as follows:
(1) Manage monetary policies proactively, flexibly, promptly, and effectively, coordinate synchronously, harmoniously, and closely with fiscal policies and other macroeconomic policies, contributing to the promotion of economic growth, and macroeconomic stability, control of target inflation in 2024 on average of about 4-4.5%, and stabilization of the currency market, foreign exchange and banking system.
(2) Conduct credit management in harmony with macroeconomic developments to contribute to promoting economic growth, controlling inflation, and macroeconomic stability, and ensuring the operation safety of credit institutions; operate credit growth of the whole system of credit institutions in 2024 to reach 15%, make adjustments by actual developments and situations; research and renovate the management of credit growth.
(3) Drastically and effectively implement the Project "Restructuring the system of credit institutions associated with bad debt settlement in the period of 2021-2025", contributing to the development of the system of credit institutions to operate in a healthy, quality, efficient, open and transparent manner by the provisions of law and proximity, and meet international standards and practices; focus on effectively implementing plans to handle weak credit institutions, restructuring commercial banks under special supervision under the direction of competent authorities.
Instruct credit institutions to step up the settlement and recovery of bad debts; improve credit quality, and prevent and limit newly arising bad debts.
(4) Focus on researching, revising, and perfecting mechanisms, policies and regulations on banking inspection and supervision activities; enhance innovation, improve the effectiveness and efficiency of inspection, inspection and supervision of the banking sector; focus on inspecting, examining and supervising potentially risky domains to prevent, detect and strictly handle risks, issues and violations of credit institutions, contributing to ensuring security and discipline in the banking and monetary market
(5) Effectively implement the Plan for the digital transformation of the banking sector to 2025 with orientation to 2030; the project on the application of non-cash payment in Vietnam in the period of 2021-2025; information technology development strategy of the banking sector to 2025, orientation to 2030; continue to take solutions to promote non-cash payment, digital banking activities and ensure security, safety and confidentiality in banking activities.
(6) Strengthen market discipline in observing the executive instructions of the Government, the Prime Minister, the Governor of the State Bank of Vietnam and regulations in banking activities.
(7) Strongly reform regulations and administrative procedures, improve the business investment environment, create favorable conditions for people and enterprises; improve the quality of officials, public employees, and employees, and ensure administrative discipline.
(8) Continue to effectively implement and supervise the implementation of the Vietnam Banking Sector Development Strategy to 2025 with orientation to 2030; The National Comprehensive Financial Strategy to 2025, orientation to 2030 and promulgated Programs, Plans and Schemes.
What are the directives on the operation of monetary, credit, foreign exchange, and gold policies in Vietnam?
In Section 2 of Directive 01/CT-NHNN 2024, the State Bank of Vietnam requires the operation of monetary, credit, foreign exchange, and gold policies in Vietnam as follows:
(1) Closely monitor world and domestic economic developments and situations in order to administer proactive, flexible, timely and effective monetary policy tools. Proactively propose and handle issues arising under the competence of the Governor or submit to the Prime Minister, the Government, the National Assembly and the Central Government matters beyond their competence:
- Manage flexible open market operations, closely adhering to monetary policy objectives; refinance credit institutions to support liquidity, provide loans to programs approved by the Government and the Prime Minister of Vietnam, support the restructuring of credit institutions and handle bad debts.
- Manage interest rates in accordance with market developments, macroeconomy, inflation and monetary policy objectives; encourage credit institutions to continue reducing costs, simplifying lending procedures, enhancing the application of technology and digital transformation in the lending process, continuing to strive to reduce lending interest rates to support the economy; direct credit institutions to publicly announce and take responsibility for the average lending interest rate of each credit institution and the difference in the average deposit and loan interest rates on the website of each credit institution.
- Manage flexible exchange rates to stabilize the foreign currency market, contributing to macroeconomic stability.
(2) Implement proactive, flexible credit management solutions suitable to macroeconomic developments, and inflation, and meet capital needs for the economy; assign all credit growth targets of 15% of 2024 at the beginning of the year to credit institutions and publicly announce the defining principles for credit institutions to actively conduct credit growth.
(3) Direct credit institutions to:
(i) Conduct safe and efficient credit growth, directing credit to production and business sectors, priority sectors and economic growth drivers (consumption, export, investment) according to the Government's policies;
(ii) Continue to strictly control credit in potentially risky sectors;
(iii) Review and simplify loan procedures and applications and collaterals, create favorable conditions for enterprises and people to access bank credit capital;
(iv) Dismantle and promote the expansion of credit to serve production and business needs and needs for life and consumption, ensuring safe and effective lending activities, contributing to limiting "black credit";
(v) Terminate credit granting concentrated on several enterprises and large groups of customers (especially customers related to the interests of bank owners).
(4) Continue to direct credit institutions to drastically implement credit programs and policies under the direction of the Government and the Prime Minister of Vietnam; coordinate with ministries and sectors in promptly removing obstacles during the implementation process; continue to implement timely and flexible solutions to drastically implement the VND 120 trillion credit program for social housing, worker's residence, renovation and reconstruction of old apartment buildings; VND 15 trillion credit program for forest products and fisheries.
(5) Continue to promote the implementation of assigned tasks of the banking sector in the National Target Programs; in particular, coordinate with ministries, sectors and localities to promptly remove difficulties in the implementation of Decree 28/2022/ND-CP of the Government on preferential credit policies for the implementation of the target program on socio-economic development of ethnic minority and mountainous areas; inspect and supervise the implementation of national target programs in localities assigned under the 2024 work program.
(6) Closely monitor the gold market for appropriate management solutions to limit the impact of gold prices on the stability of the foreign exchange market and macroeconomy, limiting goldization in the economy. In January 2024, formulate and submit to the Prime Minister a final report on Decree 24/2012/ND-CP, including a proposal to amend and supplement a number of regulations governing the gold market to suit the new context of the market.
(7) Continue to improve the quality of statistical work, statistical investigation, analysis and forecasting in service of planning, directing and administering monetary policy and banking activities. Actively and proactively coordinate effectively with relevant ministries, branches and units in providing and exchanging information and data to establish, analyze and forecast Vietnam's balance of international payments, serving the SBV's monetary policy management and the Government's macro-management.
What are the directives on restructuring the system of credit institutions associated with bad debt settlement in Vietnam?
In Section 3 of Directive 01/CT-NHNN 2024, the State Bank of Vietnam requires the restructuring of the system of credit institutions associated with bad debt settlement in Vietnam as follows:
- Resolutely perform tasks and take solutions as assigned in the Action Plan of the banking sector to implement the Project on Restructuring the system of credit institutions associated with bad debt settlement in the period of 2021-2025 issued together with Decision 1382/QD-NHNN 2022 of the Governor of the SBV.
- Instruct credit institutions to drastically and effectively implement the approved plan for restructuring associated with bad debt settlement; focus on effectively implementing plans to handle weak credit institutions; and restructure commercial banks under special supervision by the provisions of law and directions of competent authorities; coordinate with owners of weak non-bank credit institutions in directing the formulation and approval of plans for restructuring these credit institutions.
- Direct credit institutions to:
(i) Take solutions to strengthen financial capacity, management and administration capacity, improve quality and operational efficiency;
(ii) Enhance the role and responsibilities of the Control Board and internal audit in order to detect, recommend and promptly handle shortcomings, risks, violations of regulations on share ownership, manipulative ownership and dominating the operation of credit institutions;
(iii) Proactively review the provision of services related to corporate bonds and insurance agency activities; expeditiously handle reflections, recommendations, complaints, denunciations and disputes of customers/investors; detect and strictly handle violations of the law, ensure deterrence, prevention, contribute to protecting the legitimate rights and interests of customers/investors;
(iv) Step up the settlement of bad debts and credit growth accompanied by strengthening credit quality control; classify debts and set aside provisions for risks in accordance with the law, especially for restructured debts.
- Continue to implement solutions to encourage credit institutions to develop their networks of branches and transaction offices in remote localities where digital banking and modern banking services are not available to create favorable conditions for people to access banking products and services.
- Vietnam Asset Management Company (VAMC) continues to effectively carry out activities of buying, selling and settling bad debts according to market mechanisms in order to accelerate the settlement of bad debts; step up the operation of the Debt Exchange; coordinate actively with credit institutions in strengthening the settlement and recovery of bad debts and collaterals of bad debts purchased with special bonds; ensure the effective use of state capital, strengthen control and supervision of the quality and efficiency of capital use of VAMC.
- Take solutions to enhance the role of Vietnam Deposit Insurance in the handling of weak credit institutions and protecting the legitimate rights and interests of depositors.
- Review, consolidate, and improve the operation quality of non-bank credit institutions (financial companies, financial leasing companies, microfinance institutions...) in order to stimulate credit demand, increase the ability to provide official credit capital, and contribute to limiting "black credit".
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