On August 2, 2018 the Governor of the State Bank of Vietnam (SBV) issued Directive No.04/CT-NHNN on continuing to effectively implement the key tasks and solutions of the banking sector in the last 6 months of 2018.
In the first half of 2018, the SBV’s direction and management closely followed the socio-economic development targets set in the Resolutions of the Party, the National Assembly, the Government, and the directions of the Prime Minister, especially Resolution No.01/NQ-CP and Resolutions of the monthly meetings of the Government. At the beginning of the year, the SBV Governor already issued Directive No.01/CT-NHNN dated January 10, 2018 instructing all agencies and units in the banking sector to implement the key tasks and solutions in 2018, with a view to ensuring safe and efficient banking operations.
With the motto of "proactive, safe, flexible and effective", the agencies and units in the whole sector have implemented synchronously and drastically the solutions of managing the monetary policy and the banking operations. The monetary and credit indicators were in line with the orientations set out at the beginning of the year; the core inflation continued to be controlled; the interest rates, the exchange rates and the forex market were generally stable; and the foreign-exchange reserves continued to increase; the credit growth increased right from the beginning of the year, focusing mainly on production, business and priority areas in line with the Government's policy. The systemic restructuring of the credit institutions and the branches of foreign banks (referred to as CIs) in association with dealing with bad debts was carried out vigorously, in accordance with the roadmap and the plan; the inspection and supervision work was strengthened and enhanced, and continued to ensure the safety of the system, support the restructuring and dealing with bad debts. The solutions to improve the business environment and the administrative reform were actively implemented. The results have helped Vietnam to be upgraded from "BB-" to "BB" by credit rating agency Fitch Ratings.
In the context of persistent difficulties and unfavorable conditions, both for objective and subjective reasons, in order to further enhance and improve the efficiency of the implementation of the tasks mentioned in Directive No.01/CT-NHNN to ensure the fulfillment of the objectives and tasks set in the 2018 Socio-economic Development Plan, the SBV Governor requested the units in the whole sector to seriously and drastically implement the following key tasks:
I. SOLUTIONS AND TASKS
1. The government officials, civil servants, employees in the units must continue to act to the motto of "proactive, safe, flexible and effective", to implement synchronously and effectively the solutions and tasks mentioned in Directive No.01/CT-NHNN dated January 10, 2018, the directions of the Prime Minister at the Conference on the missions and tasks of the banking sector in 2018 (Notice No.89/TB-VPCP dated March 7, 2018); Action Plans No.02-CTHĐ/BCS and No.03-CTHĐ/BCS of the SBV’s Party Committee and the banking sector on implementation of the Resolutions of the 5th and 6th plenary meetings of the 12th Communist Party Central Committee; Action Program No.1178/QD-NHNN implementing Resolution No.19-2018/NQ-CP and Resolution No.35/NQ-CP of the Government…
2. Continue to implement effectively within the units and the banking sector the tasks, contents and action programs, which were already identified from the beginning of the year, specifically:
a. For the units located at the Headquarters of the State Bank of Vietnam:
- Actively manage in a flexible and synchronous manner the monetary policy instruments to stabilize the monetary market, the forex market, contributing to the macroeconomic stability and controlling the inflation within the target; at the same time create favorable conditions for CIs to efficiently supply capital to the economy, supporting a reasonable economic growth.
- Strictly control the credit growth rate and credit quality of the whole sector as well as each CI in accordance with the set objectives and orientations; Not consider to adjust the credit growth targets (except for special cases such as some commercial banks involved in the 2018 restructuring plan for poor performing CIs). Focusing credits for production and business, priority areas; strictly control credits in the areas of potential risks such as real estate, securities, BOT, BT in transport...
- Continue to flexibly manage the exchange rates in line with the market supply and demand developments, the macro-balance and the inflation control; synchronously implement the foreign exchange management solutions to stabilize the forex market, restrict the dollarization and gold hoarding within the national territory. Strictly control the lendings in foreign currencies, gradually reduce and develop a roadmap to stop lendings in foreign currencies.
- Coordinate with the ministries, agencies and local authorities in removing the difficulties and obstacles while implementing the credit programs, to create favorable conditions for the people and enterprises to access loans, especially cooperatives, small and medium enterprises; actively implement the Government's directions on implementing the incentive policies for enterprises investing in the agricultural sector.
- Coordinate closely with the ministries, agencies and local authorities in removing difficulties and obstacles in the implementation of the National Assembly's Resolution No.42/2017/QH14 on the pilot implementation of resolving bad debts of credit institutions and Decision No.1058/QD-TTg of the Prime Minister approving the Scheme of "Restructuring the system of CIs in association with dealing with bad debts during 2016-2020", ensuring that the effectiveness is achieved in accordance with the set objectives, the roadmap and the plan; make efforts to finalize the appraisal, approval/approved guidelines for the restructuring plan in association with resolving bad debts of credit institutions; closely monitor and oversee the situations and progresses of the implementation of the CIs’ restructuring plans.
- Strictly carry out the inspection and supervision plan, focusing on areas with potential risks, easily arising violations to promptly detect and issue early warnings, weaknesses, and risks of legal violations in the banking sector; conduct unexpected inspections of CIs with high credit growth rates in the areas of real estate, securities and consumer spending, which account for a large proportion of the total outstanding loans; strictly handle with cases of legal violations in the banking activities, especially those which have been issued a prior warning.
- Continue to implement effectively the Scheme on non-cash payment promotion in Vietnam for 2016-2020 period; implement the Scheme on enhancing payments via banks for the collection of public service fees such as taxes, electricity, water, education, healthcare and social security payments; urgently finalize the legal framework for payments to meet the practical requirements; further strengthen the application of high-tech to the payment activities in Vietnam; enhance the supervision of the payment systems to ensure safe and sound banking operations; strengthen the inspection and handling strictly with any violations regarding the payment activities and payment intermediary services; instruct relevant units to implement effectively the measures as mentioned in Directive No.02/CT-NHNN dated April 13, 2018 on measures of controlling transactions and activities related to cryptocurrencies.
- Organize the strong and comprehensive implementation of the administrative reform in line with the Action Plan of the banking sector to contribute to improving the business environment, enhancing the national competitiveness, supporting and developing the enterprises; strengthen the responsibilities of the units’ leaders in providing instructions and guidance, as well as the inspection of the disciplines and administrative regulations.
- Perform efficiently the tasks of information, education and communication (IEC) to generate support for the SBV’s management and governance; enhance the coordination between the SBV and the press agencies in order to improve the communication efficiency.
b) For the SBV municipal and provincial branches
- Continue to promote the state management role of the SBV branches over the credit institutions in their respective areas; inspect and supervise strictly the operations of the credit institutions in their areas, especially the operations of the People’s credit funds system; coordinate closely with the local authorities to support the credit institutions in handling with any difficulties and obstacles in the implementation of Resolution No.42/2017/QH14 and Decision No.1058/QD-TTg, contributing to accelarating the progress of resolving non-performing loans and the restructuring of the credit institutions.
- Enhance the inspection and supervision, and address strictly any legal violations regarding the payment activities, payment intermediary services under their jurisdiction in their areas; proactively monitor and update information to provide prompt alerts against new criminal hacks and tricks in electronic payments and card payments; coordinate with the relevant agencies to provide information and disseminate knowledge about payment activities, especially regarding the security and safety of electronic payments and card payments.
- Implement strictly the SBV’s directions and guidance on ensuring the security and safety in the banking operations, contributing to the monetary and financial stability; monitor closely the compliance of the credit institutions in their areas and report promptly on any arising issues.
- Continue to implement the tasks of the administrative reform and the administrative procedure simplification under the action plan as defined in 2018 and the orientations toward 2020; instruct the commercial banks and their branches in their areas to accelerate the reform of administrative procedures with the aim of improving the transparency and simplifying the procedures, cutting down on uneccesary fees to support the enterprises in accordance with Resolutions No.19 and No.35 of the Government.
c) For the credit institutions:
- Control the credit growth rate in line with the credit growth targets set for 2018 as announced, focusing on production, business, and priority fields; proactively analyze and assess the situations to control the quality and ensure the safety of their lending activities, to resolve the NPLs and to control newly arising NPLs; strictly control the credit growth rate and the credit quality in the potentially risky fields such as credit for investments and tradings in real estate, securities, transport BOTs, BTs… strictly control the credit for consumer spendings, especially in relation to real estate; strictly comply with the regulations on lending activities and the utilization of non-cash payment facilities; closely control the loan use purposes.
- Implement strictly and effectively the contents and methods of restructuring in association with handling with bad debts to 2020 as approved, making sure of following the set roadmap; apply measures as stipulated in Resolution No.42/2017/QH14 on accelerating the progress of resolving NPLs and NPL collaterals, ensuring the resolution of NPLs following the approved plan; review the debt classification, ensuring the correct reflection of the debt qualities and full risk provisioning as regulated by laws.
- Strictly implement Directive No.07/CT-NHNN dated October 11, 2017 on enhanced prevention and control of legal violations in the monetary and banking sector, contributing to stabilizing the monetary and banking industry, concentrating on ensuring the safety of deposits, the payment activities, credit for consumer spending; improve the awareness of complying with the legal regulations, the internal rules and strictly handle with any violations in the banking sector.
- Closely coordinate with the SBV entities to implement effectively the tasks of communications on monetary and banking operations, ensuring a prudent banking system and improving the public confidence in the banking sector; strengthen the tasks of communications and information dissemination, providing guidance so that the clients and customers can understand clearly the transaction procedures and steps, possible risks and frauds in electronic payments and card payments.
II. IMPLEMENTATION
1. This Directive takes effect from the date of signing.
2. The heads of the SBV entities, the Directors of SBV municipal and provincial branches, the Chairpersons of the Board of Directors, Chairpersons of the Board of Members and the General Directors of the credit institutions, foreign bank branches are responsible for organizing and monitoring the implementation of this Directive.
LH - VA