What are 8 key tasks of the banking sector in 2024 under the latest Directive issued by the State Bank of Vietnam?
- What are 8 key tasks of the banking sector in 2024 under the latest Directive issued by the State Bank of Vietnam?
- The monetary, credit, foreign exchange, and gold policies managed by the State Bank of Vietnam?
- The credit institution system associated with handling bad debts restructured by the State Bank of Vietnam?
What are 8 key tasks of the banking sector in 2024 under the latest Directive issued by the State Bank of Vietnam?
Pursuant to Directive 01/CT-NHNN 2024, the Governor of the State Bank of Vietnam requires units under the State Bank of Vietnam (SBV) and credit institutions, foreign bank branches (hereinafter referred to as credit institutions) to strictly implement the monetary policy measures and banking operations in 2024 to control inflation, contribute to macroeconomic stability, and support reasonable economic growth.
The following are the 8 key tasks of the banking sector in 2024:
(1) Proactively, flexibly, timely, and effectively implement monetary policy measures in coordination with fiscal policies and other macroeconomic policies to support economic growth, maintain macroeconomic stability, and achieve the inflation target of around 4-4.5% for 2024. Ensure the stability of the monetary market, foreign exchange market, and banking system.
(2) Harmoniously manage credit in line with macroeconomic developments to support economic growth, control inflation, maintain macroeconomic stability, and ensure the safe operation of credit institutions. The overall credit growth of the entire system of credit institutions in 2024 is estimated at about 15%, with appropriate adjustments based on actual developments. Research and innovate the management of credit growth.
(3) Implement vigorously and effectively the Project "Restructuring the system of credit institutions associated with handling bad debts in the period 2021-2025" to develop a sound, quality, efficient, transparent, and accountable system of credit institutions in accordance with the provisions of the law and international standards. Focus on effectively implementing the plan to handle weak credit institutions and restructure controlled commercial banks according to the guidance of competent authorities.
Direct credit institutions to enhance the handling and recovery of bad debts, improve credit quality, prevent and limit the occurrence of new bad debts.
(4) Focus on researching, amending, and improving mechanisms, policies, and regulations on the organization and operation of banking inspection, supervision, enhance innovation, and improve the effectiveness of inspection, examination, and supervision of the banking sector. Concentrate on inspecting, examining, and supervising areas with potential risks to prevent, detect, and strictly handle risks, existing problems, and violations of credit institutions, contributing to ensuring security and discipline in the monetary and banking market.
(5) Effectively implement the plan to transform the banking sector into digital banking by 2025 and the orientation towards 2030; the Project to develop non-cash payment in Vietnam in the period 2021-2025; the strategy for developing information technology in the banking sector until 2025 and the orientation towards 2030. Continue to promote non-cash payment, digital banking activities, and ensure security, safety, and cybersecurity in banking operations.
(6) Strengthen market discipline and discipline in complying with the government's, Prime Minister's, Governor of the State Bank's directives and regulations in banking operations.
(7) Strongly reform administrative regulations and procedures, improve the investment and business environment, create favorable conditions for people and businesses. Improve the quality of civil servants, public employees, officials, and workers, ensuring administrative discipline and order.
(8) Continue to implement and effectively monitor the implementation of the Strategy for the Development of the Vietnamese Banking Sector until 2025, the orientation towards 2030; the Comprehensive National Financial Strategy until 2025, the orientation towards 2030, and the issued Programs, Plans, and Projects.
What are 8 key tasks of the banking sector in 2024 under the latest Directive issued by the State Bank of Vietnam?
The monetary, credit, foreign exchange, and gold policies managed by the State Bank of Vietnam?
Pursuant to Directive 01/CT-NHNN 2024, the State Bank of Vietnam requests the implementation of monetary, credit, foreign exchange, and gold policies as follows:
(1) Monitor closely the developments and situations of the global and domestic economy to proactively, flexibly, timely, and effectively manage monetary policy tools. Proactively propose and handle arising issues within the jurisdiction of the Governor or submit to the Prime Minister, the Government, the National Assembly, the Central Committee for issues beyond jurisdiction. Where:
- Flexibly manage open market operations, aligning with the target of the monetary policy. Recapitalize credit institutions to support liquidity, provide loans for programs approved by the Government and the Prime Minister, support the restructuring of credit institutions, and handle bad debts.
- Manage interest rates in accordance with market developments, macroeconomic conditions, inflation, and the monetary policy target. Encourage credit institutions to continue reducing costs, simplifying loan procedures, enhancing the application of technology and digitalization in the lending process, and strive to reduce loan interest rates to support the economy. Direct credit institutions to publicly disclose and take responsibility for the average lending interest rates and the spread between deposit and lending interest rates on their websites.
- Flexibly manage exchange rates to stabilize the foreign exchange market and contribute to macroeconomic stability.
(2) Implement proactive, flexible credit management measures in line with macroeconomic developments, inflation, and capital needs for the economy. Fully allocate the credit growth target of 15% for 2024 from the beginning of the year to credit institutions and publicly announce the principles for determining credit growth for credit institutions to proactively implement.
(3) Direct credit institutions to:
(i) Ensure safe and effective credit growth, directing credit towards production, priority sectors, and economic growth drivers (consumption, exports, investments) in accordance with the Government's orientation.
(ii) Continue to tightly control credit into high-risk sectors.
(iii) Review and simplify loan procedures, loan documents, collateral assets, and create favorable conditions for businesses and individuals to access bank credit.
(iv) Remove barriers and promote credit expansion to meet the needs of production, business, and living expenses, ensuring safe and effective lending, contributing to limiting "black credit".
(v) End the practice of concentrated credit granting to certain businesses and large customer groups (especially those related to the interests of bank owners).
(4) Continue to direct credit institutions to vigorously implement credit programs and policies as directed by the Government and the Prime Minister, and cooperate with ministries and sectors to promptly resolve difficulties during the implementation process. Continue to implement timely and flexible measures to implement the 120 trillion VND credit program for social housing development, workers' housing, renovation of old residential buildings, and the 15 trillion VND credit program for the forestry and aquatic sectors.
(5) Continue to strengthen the implementation of assigned tasks in the banking sector in national target programs. Coordinate with ministries, sectors, and localities to promptly resolve difficulties in implementing Government's Decree 28/2022/ND-CP on preferential credit policies for the implementation of the national target program for socio-economic development in ethnic minority and mountainous areas. Monitor and supervise the implementation of national target programs in assigned localities according to the 2024 working program.
(6) Monitor the gold market to have appropriate management measures to limit the impact of gold prices on the stability of the forex market and macroeconomic conditions, and limit the "goldization" phenomenon in the economy. In January 2024, build and submit to the Prime Minister a report summarizing Government's Decree 28/2022/ND-CP, which includes proposals to amend and supplement certain regulations on gold market management to suit the new context of the market.
(7) Continuously improve the quality of statistical work, statistical surveys, analysis, and forecasting to serve the planning, direction, and management of monetary policy and banking activities. Actively and effectively coordinate with relevant ministries, sectors, and units in providing and exchanging information and data to compile, analyze, and forecast Vietnam's international balance of payments, serving the monetary policy management of the State Bank and macroeconomic management of the Government.
The credit institution system associated with handling bad debts restructured by the State Bank of Vietnam?
Pursuant to Section 3 of Directive 01/CT-NHNN 2024, the State Bank of Vietnam requests the restructuring of the credit institution system associated with handling bad debts as follows:
- Implement resolutely the tasks and solutions assigned in the Action Plan of the banking sector to implement the Project on Restructuring the System of Credit Institutions associated with handling bad debts in the period 2021-2025 issued with Decision 1382/QD-NHNN 2022 by the Governor of the State Bank.
- Direct credit institutions to implement resolutely and effectively the approved plans for restructuring associated with handling bad debts. Focus on effectively implementing the plan to handle weak credit institutions; implement the restructuring of commercial banks under special control according to the provisions of the law and the directions of competent authorities. Coordinate with the state ownership agencies of non-bank weak credit institutions in directing the construction and approval of the restructuring plans for these credit institutions.
- Direct credit institutions to:
(i) implement measures to enhance financial capacity, management capacity, operation quality, and efficiency;
(ii) enhance the role and responsibility of the Supervisory Board, internal audit in detecting, recommending, and promptly handling existing risks, violations of regulations on shareholding ownership, ownership with manipulative and controlling nature in credit institution activities;
(iii) proactively review activities related to corporate bond provision and insurance agency activities; promptly handle customer/investor complaints, recommendations, denunciations, disputes; detect and strictly handle violations of laws, ensuring deterrence, prevention, and protection of the legitimate rights and interests of customers/investors;
(iv) vigorously handle bad debts, credit growth accompanied by enhanced credit quality control; classify debts and set up risk provisions according to the provisions of the law, especially for restructured debts.
- Continue to implement measures to encourage credit institutions to develop branch and transaction office networks in remote areas where digital banking and modern banking services are not available, in order to create favorable conditions for people to access banking products and services.
- The Vietnam Asset Management Company (VAMC) continues to effectively carry out the activities of purchasing, selling, and handling bad debts according to market mechanisms to expedite the progress of bad debt resolution; strengthen the operation of the Debt Trading Floor; actively coordinate with credit institutions in enhancing the recovery of bad debts and the disposal of collateral assets of bad debts purchased through special bonds. Ensure the effective use of state capital, strengthen the control and supervision of the quality and efficiency of VAMC's capital utilization.
- Implement measures to enhance the role of the Deposit Insurance of Vietnam in participating in the handling of weak credit institutions and protecting the legitimate rights and interests of depositors.
- Review, improve and enhance the quality of operations of non-bank credit institutions (financial companies, financial leasing companies, microfinance institutions, etc.) to stimulate credit demand, increase the capacity to supply official credit, and contribute to limiting "black credit".
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