Where does the money go after it's deposited in the bank?

(Baonghean) - Currently, at banks, even though deposit interest rates have dropped to 7%, there are still many customers depositing savings. This shows that, despite the low interest rates, banks remain stable, unchanged, and continue to "rise" as usual! However, the problem that the Party, Government, and National Assembly are concerned about is that money is sitting idle in banks, not being disbursed! Among the current economic warnings, one that is being sensationalized by the media is "the warning about money sitting idle in banks!".

National Assembly Chairman Nguyen Sinh Hung recently stated: "The imbalance is quite serious. The current financial situation, I find it very bad!" Vice President Nguyen Thi Doan agreed with this assessment, saying that "the current economy is a realistic picture with many difficulties." She said: "I see this situation as almost frozen, with input capital increasing by more than 5% while outflow is only a meager 1%. That level is clearly alarming because money is sitting idle in banks, meaning production has stalled." In our country, never before has anyone made an assessment of the socio-economic situation leading to the conclusion that "production has stalled" as Vice President Nguyen Thi Doan did this time. However, this opinion was supported by many delegates in the Standing Committee of the National Assembly.

National Assembly Vice Chairwoman Nguyen Thi Kim Ngan agreed with this analysis: “Banks are able to mobilize funds but cannot lend them out because there is no production or business activity, and no businesses are investing in expanding production. Therefore, it is clear that budget revenues continue to be… blocked!” According to National Assembly Vice Chairwoman Nguyen Thi Kim Ngan, bad debts are high, inventories are not decreasing, and businesses continue to go bankrupt. 50% of the remaining operating businesses are also reporting losses! Chairman of the National Assembly's Finance and Budget Committee, Phung Quoc Hien, said that in recent times, deposit interest rates have been strongly curbed, possibly down to 6.5%, and while there are still many depositors, the disbursement of funds remains unpromising!

Why is that? The problem lies in the fact that businesses are not enthusiastic about expanding production and operations; goods produced cannot be sold, while there are no solutions to address the accumulated inventory. This bottleneck in the production process of businesses naturally has a ripple effect on many other aspects of the economy, such as tax collection and budget revenue… Even the banking system faces difficulties if it continues to accept deposits without an outlet!

Clearly, the issue currently attracting widespread concern is whether money from banks will return to participate in the production and circulation of goods in the economy, or whether it will remain stagnant and frozen. This is a difficult problem requiring solutions from economic experts and the valuable contributions of National Assembly deputies during this session. According to Mr. Nguyen Hanh Phuc, Head of the National Assembly Office, the most important solution is to focus on resolving the issue of excess inventory. The biggest obstacle is that businesses cannot repay their old debts, so how can they borrow new ones? Without resolving this bottleneck, business bankruptcies will continue. Many others argue that the fundamental problem lies in the purchasing power of the economy. Solutions prioritizing purchasing power and market issues are needed…

The economic solutions discussed at this National Assembly meeting are very important and also very interesting and exciting for those who follow the country's economic situation. Hopefully, the newspapers and television stations that have reported on the flow of money into banks will have the opportunity to announce the good news in reverse: money flowing from banks back into the economic cycle in the production and business activities of enterprises… We look forward to that good news!

Stone Turtle