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SBV undertaking seven measures to prevent economic downturn
The State Bank of Vietnam (SBV) has just issued guidelines on how to strengthen the credit market in order to prevent an economic recession.
On December 31st, 2008, the Governor of the SBV issued Directive No. 06/2008/CT-NHNN which detailed how to realize measures to promote economic production and business, commodity circulation, prevent an economic recession, maintain a strong economic growth rate and ensure social security.
Outlined in the Directive, the Governor of the SBV directed credit organizations to implement the following seven measures:
1. Continue to strictly follow the development and predict any impacts from the global financial crisis, and the economic downturn of the international economy on the domestic economic, the monetary market and the banking system.
2. Synchronically implement measures to mobilize capital; adjust the structure and terms of capital loans suitable with the structure and terms of credit, ensure the liquidity of businesses; timely meet demands for payment of bank deposits, especially during the Lunar New Year.
3. Increase the amount of credit available effectively and suitably with regulations of the law; apply suitable interest rate loans during this difficult economic period in which businesses and producers are facing difficulties in their production and business; and timely deal with difficulties in terms of loans and credit access by customers.
Evaluate the credit activity situation in 2008 in order to realize suitable measures on the scale, structure and increase in the rate of credit in the new year, ones which are adaptable with the capacity and structure of mobilized capital under the credit growth orientation and targets of the SBV on credit increases for the economy in 2009, as well as strictly controlling the quality of credit.
Timely build and implement specific credit programs at the beginning of 2009, locate capital and apply reasonable interest rates according to priority policies for their customers in the fields of agriculture, exports and small and medium sized enterprises and consumer products production, and promoting the production of domestic goods to replace imported ones, using domestic materials and creating jobs for employees.
Loaning rice and organizing other credit programs under the guidance of the Central government and instruction from the SBV; arranging capital to disburse credit contracts signed with major projects and key projects of the nation, and projects which meet the need to promote investment by the government.
The SBV also issued instructions for the granting of loans to producers and and businesses whose business commodities meet the demands of the domestic market before and during the Lunar New Year (Tet), especially essential commodities.
Adjust the interest rate of loans on credit contracts according to the current interest level; don’t fine small-and medium-sized bushiness if they their debt becomes overdue due to difficulties in production, business and product consumption because of the impact of the world financial crisis.
4. Social Policy Banks will take the initiative in building plans to mobilize capital under the current mechanism and summit to superior bodies to supplement other capital sources to ensure enough capital can be granted to the the poor, students and other people who social welfare assistance; check and adjust regulations on banking operations and loan procedures to create more favourable conditions for social welfare beneficiaries to access loans in a timely mannar.
5. Intensify inspection and internal auditing, and available capital management under the regulations of the SBV on rates to ensure business operations; check, adjust and complete internal process dealing with credit operations, monetary business, foreign exchange payments and other transactions, which are suitable with the law; evaluate risks which maybe happen in each banking operation process to carry out preventive measures and deal with any risks which might arise.
6. Hasten the implementation of projects on banking technology modernization in order to improve business administration capacity, concentrate payments at the head office of the bank, and then connect the whole system together; and attach special importance to improve banking services for customers.
7. Implement and ensure the provision of true information and reports under the regulations of the SBV.
The SBV predicts that in 2009 Vietnam’s economy will have the necessary conditions to maintain a high economic growth rate, but will meet with numerous difficulties due to bad effects from the world financial crisis and the sharp economic downturn.
TBKTVN
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