Vietnam Prime Minister requests faster, more flexible credit management

Credit management must be faster, flexible and effective, Prime Minister Pham Minh Chinh has ordered.

The government leader required credit institutions to firmly grasp the situations in different sectors to proactively and flexibly provide credit to the economy and serve production and business, focusing on three growth drivers: consumption, export, and investment.

“They must listen to and acquire opinions from relevant stakeholders, and not be willful, conservative, subjective, negligent, or unrealistic,” he said in a Government Office release.

We need to continue promoting the fight against negative acts in the banking system, the Prime Minister noted, urging banks to be more flexible in lending without compromising standards.

“We should strengthen management based on market principles, and reduce and eventually eliminate administrative tools in operating and managing the credit institution system,” he added.

The Prime Minister also requested stronger and more effective inspections and supervision of the credit institution system to detect risks early and strictly handle any violations in accordance with legal regulations.

“The inspection and strict handling of violations regarding cross-ownership of credit institutions and lending to businesses in their own ecosystems and “backyard” companies, as well as the introduction of corporate bonds and insurance products at credit institutions, must be completed in January 2024,” he required.

Earlier this month, Deputy Prime Minister Le Minh Khai requested the Government Inspectorate to look into the SBV’s management of credit growth in 2022 and 2023.

It would focus in particular on the central bank’s implementation of assigned functions and tasks in managing credit growth; building, allocating and administering credit growth quotas; and the management and supervision of credit growth in the period.

The inspectorate has been asked to submit the results of its investigation in January 2024.

As of November 30, total outstanding loans in the banking system had reached VND13,000 trillion ($535 billion), up 9.15% against the end of 2022, below the whole-year target of 14.5%, the State Bank of Vietnam’s data showed. Given the available room, local banks could pump around $30 billion into the economy in December.