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Helping businesses access capital more easily but not by lowering lending standards


This is the confirmation of Standing Deputy Governor of the State Bank of Vietnam Dao Minh Tu at the regular Government press conference in May 2020 that took place on the evening of June 2 in Hanoi.

The leader of the State Bank of Vietnam (SBV) emphasized: So far, not lowering lending standards has been a principle of lending and credit. Because lowering standards is synonymous with bad debts and insecurity of each credit institution (CI) as well as the entire banking and financial system.

“The law has clear regulations on ensuring the principles of lending and credit, credit institutions are responsible for this”, the Deputy Governor said.

In order to support those affected, the State Bank of Vietnam recently issued Circular No. 01/2020/TT-NHNN directing credit institutions, foreign bank branches to restructure the repayment periods, waive and reduce the interest and fees, maintain the debt classifications in order to support those customers affected by Covid-19 pandemic and related guidance documents.

When implementing, the SBV's leaders have directed the entire banking industry to drastically accelerate capital support for businesses, people in difficulties but this does not mean loosening lending standards. Credit institutions have created conditions for many businesses to postpone their due loan payment and interest obligations to the end of 2020.

For enterprises with effective projects, capital support is being implemented in a rapid manner. As for customers who are in difficulty, or do not need new loans, credit institutions are actively deploying postponement and extension of loan repayment obligations to share difficulties with enterprises.

In fact, capital support in parallel with credit quality assurance is being carried out in parallel.

“To provide better support, the State Bank of Vietnam is gathering opinions on difficulties arising in the implementation process, thereby considering adjusting and supplementing the contents of Circular 01 in order to create favorable conditions for businesses, speed up the support and disbursement of capital ”, Deputy Governor Dao Minh Tu said.

As reported by the State Bank of Vietnam, after more than 2 months of drastic implementation, as of May 25, all credit institutions have restructured repayment term for more than 223,000 customers with more than VND 151 trillion of outstanding loans; has exempted, reduced, reduced interest rates for more than 320,000 customers with outstanding loans of over VND 1.14 million billion; provided new loans with preferential interest rates with cumulative loan turnover from January 23 to date of more than VND 767 trillion for over 196,000 customers, with interest rates 0.5 - 2.5% lower than the pre-Covid-19 period.


Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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