Exceeding the lending target for the 30,000 billion VND package.

(Baonghean.vn) - Explaining the decision to end the program two months earlier than planned, the State Bank of Vietnam (SBV) stated that as of March 10th, out of the total 30,000 billion VND refinancing package provided by the SBV to commercial banks, the commercial banks had committed to lending 30,122 billion VND, exceeding the lending plan.

By mid-March, 71% of the 30 trillion VND package had been disbursed. Graphic: Huu Quan

Specifically, as of March 10th, banks had provided loans to 46,246 customers, with the disbursed amount exceeding VND 21,321 billion (approximately 71%). The committed credit package exceeded the VND 30,000 billion ceiling as stipulated, and the State Bank of Vietnam has fulfilled its responsibilities…

Therefore, on March 29th, the State Bank of Vietnam (SBV) issued an urgent document to 19 commercial banks eligible for the 30,000 billion VND support loan package, requesting them to stop signing new credit contracts from March 31st, 2016, for all customers eligible for this preferential loan package. At the same time, the commercial banks were instructed to focus on disbursing funds for existing contracts in accordance with legal regulations.

The State Bank of Vietnam's proactive approach as the organizer and leader of this preferential loan program is clearly demonstrated in two points: Firstly, the State Bank of Vietnam listened to the aspirations of the people, public opinion, and market signals… to promptly make numerous proposals and decisions to adjust and upgrade the preferential terms in terms of loan duration, loan amount, interest rate, and eligible beneficiaries of the loan package. This accelerated the implementation and completion of the preferential loan package close to the deadline set three years prior in Circular 11/2013/TT-NHNN dated May 15, 2013, of the State Bank of Vietnam.

Secondly, the State Bank of Vietnam (SBV) promptly grasped the needs and considered the potential dual impacts of ending the 30,000 billion VND package on May 31, 2016, forcing borrowers to accept the disbursement of the remaining amount under commercial interest rate conditions. Therefore, on March 22, the SBV submitted a proposal to the Government to extend this program until all funds are disbursed. Simultaneously, at the Government's regular meeting on March 26, 2016, the SBV Governor once again supported the Minister of Construction's opinion on extending the 30,000 billion VND support package until its completion and requested the Prime Minister to allow the disbursement of the remaining signed contracts at the preferential interest rates as committed in this loan package (i.e., a change in stance compared to before, when instructing commercial banks to disburse the loan capital after May 31 at current commercial interest rates).

Transactions at BIDV Nghe An branch. Photo: Tran Chau

Public opinion agrees with and welcomes the reasonable and insightful opinions of the State Bank of Vietnam and the Ministry of Construction. In fact, this credit package also had a positive outcome; accordingly, the Government officially allowed the disbursement of signed loans at the preferential interest rates that borrowers were entitled to and committed to in the signed loan agreements. Along with the early development of appropriate credit policies in accordance with the spirit of Government Decree 100/2015/ND-CP on the management and development of social housing under the Housing Law, the proactive approach and positive conclusion of the 30,000 billion VND preferential credit package is considered a prime example and reinforces confidence in the positive nature of the socialist-oriented market economy, managed by a socialist state of the people and for the people in Vietnam.

Dr. Nguyen Minh Phong