Nghe An Banking Industry: 70 years of establishment and development

70 years ago, in the victorious atmosphere of the resistance war against French colonialism moving into the general counter-offensive phase, implementing economic measures and policies outlined by the 2nd National Party Congress, on May 6, 1951 at historic Tan Trao, President Ho Chi Minh signed Decree No. 15-SL establishing the National Bank of Vietnam.

In Nghe An, implementing Decree No. 17-SL dated May 6, 1951, on July 15, 1951, all treasury and production credit agencies were converted into branches of the National Bank.

Nghe An Banking Industry always promptly meets customers' needs. Photo: Hoang Vinh

The 70-year journey of Nghe An Bank has been a journey full of challenges, difficulties, hardships but also full of pride. From its establishment to 1954, Nghe An Bank has successfully completed the task of issuing financial banknotes in the area, managing the issuance and circulation of currency during the resistance war; promoting credit work to serve production in the form of indirect credit, and developing the local economy.

From 1955-1957, during the economic recovery period, Nghe An Bank shifted from indirect lending to direct lending to individual farmers for agricultural production and other industries.
Entering the period of economic reform and development, building the material and technical foundation of socialism in the North, Nghe An Bank, together with banks across the country, carried out the second monetary reform, with banking currency replacing financial currency.
During the resistance war against the US to save the country from 1965 to 1975, Nghe An Bank promptly and effectively served the economy in the transition from peacetime to wartime.
In 1976, Nghe An and Ha Tinh merged into Nghe Tinh province. At that time, like the whole country, Nghe Tinh had only one State Bank with 27 branches in districts, towns, and cities (in 1985, Ben Thuy branch was added) performing all banking operations, both as an issuing bank and a lending bank for the economy. This model had a certain effect in the process of restoring and renovating the economy after the war in the condition that the whole country was unified and moving towards socialism and was under the US embargo, but the role and effectiveness of the banking sector's tools gradually weakened due to the heavily subsidized centralized economic management mechanism, the economy was seriously unbalanced in many aspects, and inflation was increasingly high in the late 1970s.
In 1981, implementing Decision No. 259/CP of the Government Council, the Construction Bank was transferred from the Finance system to the Banking system.
In 1988, implementing Decree No. 53/HDBT of the Council of Ministers, the banking system was transferred to business accounting, separating the State banking system into 2-level banks. The State Bank with the function of state management and specialized banks performing the function of currency trading.
Since 1990, Nghe An Banking industry and the whole country's Banking industry have been organized and operated under 2 Banking Ordinances and in 1999 implemented under 2 sets of laws: the Law on the State Bank and the Law on Credit Institutions, along with Conclusion No. 20-KL/TW dated June 2, 2003 of the Politburo. (This is the third conclusion of the Politburo for the province and city, after the Conclusion for Hanoi and Ho Chi Minh City), and later Resolution No. 26-NQ/TW dated July 30, 2013 of the Politburo, clearly oriented the development goals and tasks of the province, created favorable conditions in terms of policies, investment resources, infrastructure, formed an attractive environment for investment capital flows, promoted the socio-economic development of the province, and facilitated the development of the banking industry in the area.
From a transaction office in Nui Thanh with 32 staff, up to now, Nghe An Bank has a diverse system of credit institutions, spread across 21 districts and cities in the province, including the State Bank of Vietnam provincial branch, 124 credit institutions, credit institution branches; 283 transaction offices, 298 ATMs, 1,680 POS, 1 Deposit Insurance Branch of the North Central Region, with nearly 5,000 staff.

State Bank of Vietnam, Nghe An Branch inspects operations at credit institutions. Photo: Hoang Vinh

Under the direction of the State Bank Branch, local banks have maximized local capital resources, focused on promoting lending, focusing on serving key projects of the province, priority areas of the Government, contributing to economic restructuring, limiting black credit, supporting local poverty reduction.

As of March 31, 2021, the total mobilized capital reached over 164 trillion VND, the average growth rate over the past 20 years was 23.23%. Total outstanding credit loans reached over 228 trillion VND, the average growth rate over the past 20 years was 25.04%, outstanding loans for agricultural and rural development reached 102,300 billion VND, accounting for 45% of the total outstanding loans, loans for policy beneficiaries through the Social Policy Bank reached 9,144 billion VND with 231,978 households receiving loans.

In addition to credit expansion, banks constantly focus on and improve credit quality, along with strengthening inspection and supervision of the State Bank branches, the bad debt ratio is always maintained below 1% of total outstanding debt. Nghe An is currently the leading province in the North Central region in terms of mobilization, outstanding debt and number of credit institutions and level 1 branches; ranked 6th in the country in capital mobilization and ranked 4th in outstanding loans.

Bank leaders presented souvenir flags to teams participating in the Sports Tournament to celebrate the industry's founding anniversary. Photo: Hoang Vinh

Along with the development of traditional services, banks also focus on investing in infrastructure, creating the premise for strong development of other types of services, especially non-cash payment activities, considering this a suitable and effective development direction in the competitive and international integration conditions of the industry.

State Bank of Vietnam, Nghe An province branch, gives gifts to poor people in Dien Chau. Photo: Hoang Vinh

In addition to professional activities, social security work has always been of interest. Up to now, Nghe An Banking sector has contributed hundreds of billions of VND in charity support, supported 18 heroic Vietnamese mothers for life and built many gratitude houses, schools, medical stations, supported the construction of Truong Bon Historical Relic Site...

Nghe An Banking Industry receives First Class Labor Medal. Photo: PV

The efforts of the Nghe An Banking sector have been recognized and highly appreciated by the Government, the State Bank of Vietnam, and local authorities. Many collectives and individuals have been awarded the Labor Medal by the President and Certificates of Merit by the Governor and Chairman of the Provincial People's Committee.
Thus, it can be said that throughout the development history of the Industry and the Province, Nghe An Banking Industry has, is and will always strive to fulfill its mission, contribute to the growth of the Banking system and serve well; contribute to the completion of the province's socio-economic development target programs./.