State Bank Governor answers questions from National Assembly deputies

(Baonghean.vn) -This afternoon, August 21, under the chairmanship of Comrade Nguyen Sinh Hung - Chairman of the National Assembly, the National Assembly Standing Committee held an online conference to question and answer questions for Governor of the State Bank Nguyen Van Binh.

Attending at Nghe An bridge were comrades: Pham Van Tan - Deputy Head of the Provincial National Assembly Delegation; Dinh Thi Le Thanh - Member of the Standing Committee, Vice Chairwoman of the Provincial People's Council; leaders of the State Bank of Vietnam, Nghe An Branch, and representatives of a number of commercial banks in the area.

View of the meeting at Nghe An bridge

At the question and answer session, delegates focused on three main groups of issues: Solutions to handle bad debt and creating favorable conditions for businesses to access capital; Issues in implementing the project to restructure the system of credit institutions.

According to the report of the State Bank of Vietnam, from 2008 to present, bad debt of credit institutions has tended to increase rapidly. As of March 31, 2012, bad debt was 202,099 billion VND, accounting for 8.6% of total outstanding debt. Of which, bad debt of the group of state-owned commercial banks was 125.8 trillion VND, and of the group of joint-stock commercial banks was 60.9 trillion VND.

To handle bad debts, the State Bank has focused on directing credit institutions to comply with legal regulations on lending activities, not to lend new loans to pay off old debts with the purpose of concealing old debts; to restructure debts reasonably to reduce financial difficulties for enterprises; to review and complete regulations on debt classification, provisioning and using appropriate risk reserves. On the part of credit institutions, they have proactively coordinated with customers to restructure debts, extend debt repayment periods and consider reducing interest rates reasonably for customers; to increase provisioning and use of risk reserves to handle bad debts according to regulations, to handle collateral assets of bad debts to recover capital, etc.

In recent times, in order to facilitate businesses to access capital sources, the State Bank has continuously adjusted down the operating interest rates and maximum deposit interest rates in VND of organizations and individuals at credit institutions; Directed credit institutions to actively shift the credit structure towards focusing capital on priority sectors; adjusted debt repayment terms and extended debt for customers with positive production and business activities and good debt repayment capacity; Adjusted down the lending interest rates of previous loans to a maximum of 15%/year.

At the question and answer session, 35 National Assembly deputies registered to question, 15 National Assembly deputies were asked directly, and 38 questions were asked to the Governor of the State Bank.

Governor of the State Bank Nguyen Van Binh answered clearly and closely the questions raised by the delegates; the Governor also frankly and seriously accepted responsibility for the shortcomings and limitations of the State Bank as well as the operations of the bank in general in the past time; at the same time expressed his determination to limit old bad debts and not increase new bad debts. He also requested that commercial banks continue to pay attention to supporting enterprises in accessing capital sources to promote production and business, and open up the consumer market. Regarding the restructuring of credit institutions, the State Bank will focus on handling weak commercial banks; propose many practical solutions to accelerate the restructuring process of the banking system as the set goal.

Concluding the meeting, on behalf of the National Assembly Standing Committee, Comrade Nguyen Thi Kim Ngan - Vice Chairwoman of the National Assembly, emphasized: Through this question-and-answer session, more information has been provided for National Assembly deputies and voters to know and increase people's trust in the banking sector. Propose that the Governor of the State Bank continue to pay attention to directing the implementation of solutions and a roadmap for restructuring the banking system according to the principle of not allowing credit collapses to occur beyond control. Gradually improve financial management and operational capacity to develop a healthy, safe and effective system. Continue to adjust and reduce lending interest rates, creating conditions for farmers and businesses to access capital with low interest rates. Focus on lending to priority areas. Propose that the Governor closely monitor the field of monetary and credit policy to make appropriate adjustments, ensuring reasonable increase in outstanding credit to both promote production and business and control inflation. Urgently assess the current situation of bad debt, analyze the movement of each type of bad debt to implement measures to resolve bad debt and handle weak banks, with a roadmap and appropriate time...

Quynh Lan