What recommendations does the Foreign Bank Working Group recommend regarding policy and legal mechanisms for the Vietnamese banking industry?

According to the State Bank’s report, in 2023 many solutions, policies and credit programs have been implemented synchronously and drastically by the State Bank, focusing all resources to ensure sufficient capital supply for the economy. economy, promoting economic growth of about 5% (lower than the set target but a high growth rate in the world), supporting businesses and people to overcome difficulties and restore production and business. In particular, we focus on perfecting the legal framework for lending, simplifying procedures, reducing loan documents, and promoting bank-business connections nationwide; increase specific credit programs and products, incentives…, creating more favorable conditions for people and businesses to access bank credit. Many credit programs have been implemented to well implement social policies, contributing to the successful implementation of 3 national target programs on sustainable poverty reduction, new rural construction, and regional socio-economic development. ethnic minorities and mountainous areas. With the State Bank’s system of synchronous directions and solutions, by December 31, 2023, credit will increase by 13.71% compared to the end of 2022.

Also in 2023, operating interest rates will be adjusted four times in a row, with a decrease of 0.5-2.0%/year in the context that world interest rates continue to increase and remain anchored at high levels, creating favorable conditions for conditions to reduce market lending interest rates.

At the same time, direct credit institutions to reduce costs and synchronously apply measures to reduce lending interest rates. To date, deposit interest rates and loan interest rates of new transactions of commercial banks have decreased by more than 2.5%/year compared to the end of 2022.

Mr. Ramachandran As – General Director of Citibank Vietnam commented that 2023 is a challenging year for monetary policy management and banking operations in Vietnam due to many difficulties at home and abroad. . Faced with such great pressure on the banking industry, the Government and the State Bank of Vietnam have managed policies to achieve economic goals and efficiency such as: GDP growth of 5.05%, higher than the global level. demand, successfully controlling annual inflation at 3.8%. Vietnam achieved the highest realized FDI capital in the last 5 years, affirming its position as a leading attractive investment destination, and a potential production center and trade partner. This is an important effort and achievement in the context of global inflationary pressures. According to this person, the strict supervision and timely intervention of the State Bank have helped stabilize the economy, ensuring stable consumer prices.

Throughout 2023, the SBV has flexibly managed monetary policy with a number of actions such as reducing operating interest rates four times; ensure liquidity and control bad debt; digital transformation efforts and green banking initiatives. These strategies not only play an important role in stimulating the economy and supporting businesses during difficult economic times; but also enhances the health and operational efficiency of the banking system.

Mr. Ramachandran As, the international community’s trust and appreciation for Vietnam’s achievements and monetary policy management activities is the clearest proof. Notably, the US Treasury Department continues to determine that Vietnam does not manipulate currency; improve Vietnam’s national credit rating in 2023; Vietnam was honored as one of the 3 best countries in the world in the Global Central Bank Assessment Report. Looking forward to 2024, the Foreign Banking Working Group is very optimistic when making predictions about opportunities and challenges in the coming year.

“We appreciate the Government and the State Bank’s continued efforts and determination to direct and complete the legal framework, mechanisms and policies in accordance with international practices,” he said.

To continue achieving positive results, the Foreign Banking Working Group recommends a number of key policies to focus on in 2024.

Specifically, balancing inflation and growth. In particular, continue to carefully control inflation while supporting sustainable economic growth.

In the coming time, strengthen the effective payment system, strongly promote financial inclusion and support overall economic growth, with a focus on applying digital transformation to facilitate the promotion of financial services. safer and more accessible for all segments of the population. From there, develop a comprehensive financial ecosystem and actively contribute to the country’s economic development.

Policy and legal mechanisms continue to be improved to ensure the safety of the banking system and in accordance with international practices. Especially the promulgation of the amended Law on Credit Institutions and related legal documents to strengthen the legal foundation for the Vietnamese banking industry.