A private bank leader stated that the State Bank’s issuance of Circular 06 amending Circular 02 helps ease repayment pressure on customers and provides them with better recovery conditions. The bank will also benefit from this decision as customers recover well, improving their debt repayment ability and reducing the pressure of bad debt at the bank.
In the past, banks have faced increasing bad debt pressure due to customers’ difficulties in repaying loans. Despite the banks’ efforts to handle the situation, the weak liquidity in the real estate market has made it challenging to liquidate secured assets during this period.
Businesses will have their loan payments deferred until the end of the year.
MB’s General Director, Pham Nhu Anh, believes that extending Circular 02 will address the fundamental challenges faced by businesses that have needed restructuring in the past and will continue to do so in the future. The MB leader hopes that by the end of the year, there will be positive changes in the domestic and global economies, leading to stability, and with the bank’s solutions, businesses will be on a path to recovery.
According to Mr. Anh, when restructuring debts, banks still make provisions as usual, with the only difference being that the customer’s debt group remains unchanged to maintain the credit relationship with the banks.
The State Bank’s decision to extend the deadline to December 31, 2024, is appropriate. After this period, the true nature of the debts must be reflected to enable more suitable management, ensuring the system’s safe operation. Not all banks have the financial flexibility to immediately make full provisions for restructured debts. Banks must accurately assess businesses’ recovery and repayment capabilities while carefully monitoring them during the restructuring process…
Many experts suggest that while the economy showed signs of recovery in the first months of 2024, there are still underlying risks and challenges. Production and business activities in some sectors remain challenging, and the economy’s demand is weak, leading to slow credit growth.
Therefore, extending the deadline for implementing the policy of restructuring loan repayment deadlines and maintaining the debt group according to Circular 02 until December 31, 2024, will continue to help businesses overcome difficulties, ease customers’ repayment pressure, and facilitate capital turnover and access to new loans.
Mr. Dao Minh Tu, Deputy Governor of the State Bank, stated that supporting businesses is also supporting banks, but this should not be overused. The debt restructuring policy will eventually impact the country’s finances.
This is also the reason why the State Bank proposed to extend Circular 02 for another six months (instead of a longer period). At the end of 2024, the situation will be reassessed, and if businesses are still struggling, other support mechanisms will be considered.
For now, the Deputy Governor has requested credit institutions to seriously implement the recently issued Circular 06, which amends Circular 02 to support customers facing difficulties. The State Bank will continue to closely monitor the policy’s implementation to promptly address any challenges.
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