Prime Minister requests further efforts to reduce lending interest rates

Prime Minister Pham Minh Chinh has just signed and issued Official Dispatch No. 122/CD-TTg dated November 27, 2024 to the Governor of the State Bank of Vietnam on strengthening credit management solutions in 2024.

In the past time, under the leadership of the Party, the support of the National Assembly, the drastic and timely direction of the Government, the Prime Minister and the close coordination of all levels, sectors and localities, the State Bank of Vietnam and the system of credit institutions have made many efforts, closely following reality, focusing on drastic, synchronous, effective and focused implementation of key tasks and solutions in the monetary and banking sector, contributing positively to the socio-economic development results of the country since the beginning of the year.

However, in the context of the world situation continuing to develop complicatedly, military conflicts persisting in some regions, the global economic recovery is slow, uneven, and unstable; natural disasters and climate change have greatly affected many countries. Domestically, production and business activities of people and enterprises are facing many difficulties, especially heavy damage caused by storm No. 3, natural disasters, and floods in many localities, access to credit is still difficult, and bad debt of banks is increasing.

In order to further improve the efficiency of credit management in 2024, strengthen state management of the monetary and banking sectors to further promote economic growth and strive to achieve the highest possible level of all key targets of the 2024 socio-economic development plan according to the policies, Resolutions and Conclusions of the Party, National Assembly and Government; The Prime Minister requested the State Bank of Vietnam to preside over and coordinate with relevant agencies to continue to closely monitor developments in the international and regional situation, changes and adjustments to financial and monetary policies of major economies to analyze and have timely and effective policy responses.

The State Bank of Vietnam shall preside over and coordinate with agencies to implement proactive, flexible, timely, and effective monetary policies, closely and harmoniously coordinate with a reasonable, focused, and key expansionary fiscal policy and other macroeconomic policies; in which, it shall focus on implementing more drastically and effectively the tasks and solutions on interest rate and exchange rate management, credit growth, open market management, money supply, and reducing lending interest rates, etc. to provide capital to the economy at reasonable costs.

In addition, the money is released and withdrawn in a rhythmic, synchronous, reasonable manner, without jerkiness and creating liquidity pressure for the banking system, in order to support people and businesses to quickly overcome the consequences of storm No. 3, restore and develop production and business, promote economic growth associated with macroeconomic stability, control inflation, ensure major balances of the economy, safety of banking operations and the system of credit institutions.

The State Bank shall preside over and coordinate with relevant agencies to urgently, effectively and promptly implement credit solutions in line with macroeconomic developments, inflation and meet capital needs for the economy, remove difficulties for people and businesses, support production and business development, create jobs and livelihoods for people in the spirit of harmonious interests, shared risks, mutual love, mutual assistance, ensuring the most effective and substantial flow of credit capital into the economy, absolutely not allowing congestion, delay, wrong timing, wrong address, creating a mechanism of asking for and giving, and negativity in the credit granting of the credit institution system. Implement the credit growth target for 2024 at 15%.

In addition, continue to effectively and more strongly implement solutions within the authority to reduce the lending interest rate level of the credit institution system, support people and businesses to have conditions to develop production and business, generate revenue, profit and repay loans to banks.

The State Bank shall preside over and coordinate with relevant agencies to direct credit institutions to focus credit on production and business sectors, priority sectors and economic growth drivers, digital transformation, green transformation, response to climate change, circular economy, sharing economy, science, technology and innovation, etc.; strictly control credit for risky sectors, ensure safe and effective credit activities; continue to have policies to remove difficulties in accessing credit for businesses and people. Promote lending to serve production, business and consumer needs at the end of the year and Tet At Ty 2025.

Continue to make more efforts to reduce lending interest rates through cost reduction, simplification of administrative procedures, increased application of information technology, digital transformation, etc.

Promote effective implementation and ensure publicity and transparency of preferential credit packages suitable to the characteristics of each credit institution for important sectors, contributing to promoting the growth drivers of the economy according to the Government's policy, especially credit packages for social housing, workers' housing, credit packages for forestry products, aquatic products, etc.; promote the role, enhance social responsibility and business ethics of credit institutions in sharing and supporting people and businesses when facing difficulties.

The State Bank shall preside over and coordinate with relevant agencies to continue to proactively review and summarize customers who are borrowing capital and are suffering losses due to the impact of storm No. 3 to promptly apply support measures and remove difficulties for customers through measures such as restructuring debt repayment terms, exempting and reducing loan interest rates, continuing to provide new loans to restore production and business activities after the storm according to current regulations, and handling debts for customers who have suffered losses according to regulations.

The State Bank shall preside over and coordinate with relevant agencies to promote, strengthen inspection, examination, control and closely monitor the granting of credit and the announcement of interest rates by credit institutions, promptly and strictly handle violations according to regulations; and have effective solutions to promptly handle bad debts of the credit institution system.

The Prime Minister assigned Deputy Prime Minister Ho Duc Phoc to directly direct the State Bank of Vietnam and relevant agencies to perform the tasks assigned in this dispatch.

The Government Office monitors and urges according to assigned functions, tasks and authorities.