Credit institutions directed to reduce lending rates for credit development

The Vietnam State Bank yesterday issued Dispatch 4462/NHNN-CSTT asking all credit institutions to implement a number of practical solutions for credit growth.


Accordingly, the State Bank of Vietnam (SBV) requests that credit organizations and foreign bank branches (credit institutions in short) continue their drastic efforts to reduce lending rates by 1-2 percent per year by adopting cost reduction solutions, simplifying lending procedures, and enhancing the application of information technology and digital transformation into lending processes.

Credit institutions are also directed to channel capital into traditional growth drivers, emerging industries, green transformation, circular economy, and social housing to support businesses and individuals in developing their production and business activities, and to increase access to bank credit in line with the directives of the Government and the Prime Minister.

A stable and reasonable deposit interest rate level must be maintained corresponding to the capital balance capability, healthy credit expansion capability, risk management capacity of each credit institution, as well as the stability of the money market and market interest rates.

SBV asks that credit institutions continue implementing effective credit growth solutions that are accurate, targeted, and meet the timely credit capital needs of the economy, focusing on production and business sectors, priority fields, and striving to achieve a system-wide credit growth of 5-6 percent by the end of the second quarter of 2024.

Finally, it is requested that credit institutions must strictly control credit in potentially risky sectors to ensure safe and effective credit operations.

Before this, SBV had already issued a formal dispatch asking its branches in different provinces and municipalities conduct activities to foster bank – business links and actively cooperate with the local authorities to understand the current status and timely address any credit-related problems so that clients in need can access the credit capital.

These requests are to implement the instructions of the Government in Dispatch No.18, issued on March 5; Dispatch no.32, issued on April 5; Directive No.14, issued on May 2; Announcement No.231/TB-VPCP, issued on May 18; and Directive No.1, issued on January 15 about carrying out core missions of the banking industry in 2024.

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