Prohibition of granting credit to bank management board with preferential interest rates in Vietnam

Prohibition of granting credit to bank management board with preferential interest rates in Vietnam

The Prime Minister requires the State Bank of Vietnam to implement the following:

- Urgently carrying out the assigned tasks in Official Telegram 1224/CĐ-TTg dated November 26, 2023, and Notice 527/TB-VPCP dated December 18, 2023. Focusing on actively, flexibly, timely, efficiently, feasibly, scientifically, and in accordance with regulations, closely monitoring the monetary policy, and ensuring the prevention of mechanisms such as favoritism, group interests, negative impacts, corruption, etc., in credit growth. Ensuring the provision of sufficient healthy credit, with a focus on serving the economy and the safety of the credit system, avoiding congestion, obstacles, delays, or unhealthy credit growth that serves group interests or personal gains.

- The Governor of the State Bank of Vietnam shall direct the use of tools as prescribed to strengthen inspections, examinations, controls, and strict supervision over the use of assigned credit growth limits by credit institutions. Ensure that credit flows are concentrated in priority sectors, important sectors, and economic growth drivers (consumption, exports, and investment), serving the development needs of production and business for enterprises and individuals who are capable of expanding their production and business in a safe, healthy, and sustainable manner but lack capital.

Prohibitting the granting of credit that does not comply with legal regulations, does not target the right recipients, and the granting of credit to the leadership, executive boards, and related individuals of credit institutions, eco-system entities, shadow entities, etc., at preferential interest rates, while individuals and businesses with legitimate and legal needs encounter difficulties in accessing credit. At the same time, implementing tools to control inflation and minimize and limit the increase of bad debts for weak credit institutions and those at risk of increasing bad debts.

- Coordinating closely with the Ministry of Finance and relevant agencies to strictly handle the improper consulting and introduction of customers for investment and purchase of corporate bonds, as well as improper insurance consulting and sales at credit institutions, which cause property damage to customers.

More details can be found in Official Telegram 1403/CD-TTg dated December 22, 2023.

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