At the conference “Implementing Credit Solutions to Support Businesses and People Affected by Storm No. 3,” held by the State Bank on September 20, 2024, Deputy Governor of the State Bank Dao Minh Tu announced that as of September 20, the entire system had recorded 83,418 customers affected by Storm No. 3 and floods, with a total affected debt of about VND 116 trillion.
INSTANT INTEREST RATE REDUCTION WITHOUT WAITING FOR CUSTOMER REQUESTS
Mr. Le Quang Vinh, Deputy General Director of Vietcombank, said that immediately after receiving directions from the State Bank, Vietcombank implemented an interest rate reduction of up to 2% for both existing and new loans based on the extent of the damage. The total debt with reduced interest rates due to Storm No. 3 at Vietcombank is expected to be VND 160 trillion. The program will be carried out until the end of 2024.
“As soon as we identified the damage suffered by our customers, we immediately reduced the interest rates on their existing loans without waiting for them to request it. For customers with severe damage, we are developing a separate support policy tailored to each customer’s characteristics. The bank commits that as soon as the State Bank issues a special support policy for people and businesses affected by this storm and flood, Vietcombank will strive to implement it as quickly as possible,” said Mr. Le Quang Vinh, Deputy General Director of Vietcombank.
According to Mr. Doan Viet Nam, Deputy General Director of BIDV, as of September 20, the bank identified more than 1,000 individual and organizational customers affected by Storm No. 3, with outstanding debt of over VND 40,000 billion. BIDV reduced interest rates by 2% for these customers. In addition, BIDV also launched a new credit package worth VND 60,000 billion with preferential interest rates for those affected by Storm No. 3 but without existing credit relationships with BIDV.
In addition, the banks stated that they had mobilized resources from their staff and employees to support people affected by the storm and floods.
“In addition to mobilizing the contribution of one day’s salary from our staff and employees, like other credit institutions, MB also built a Charity Platform (thiennguyen.app) to call for more support and solidarity with people in the storm and flood areas. Through this platform, we have raised an additional VND 60 billion to help the people in these affected areas,” said Mr. Tran Minh Dat, Deputy General Director of MB.
“We propose that the State Bank direct the entire system to promptly and timely implement debt restructuring and ensure synchronization across the system because if a customer is reclassified on the CIC (National Credit Information Center), the debt outstanding in other credit institutions will also be affected.”
Regarding credit policies for customers affected by storms and floods, the Deputy General Director of MB said that immediately upon receiving directions from the State Bank, MB implemented support solutions for customers based on the extent of damage, the financial capacity of the customers, and the current applicable interest rates.
“For existing loans, MB reduced interest rates by 1-2% for medium and long-term debt and by 0.5-1% for short-term debt. The program is effective from September 20 until the end of 2024. In addition, we also launched a preferential loan package worth up to VND 2,000 billion with a loan interest rate reduction of up to 1% for individual and household business customers with diverse purposes of rebuilding their lives after the storm and flood,” informed Mr. Tran Minh Dat.
To facilitate new credit for customers damaged by Storm No. 3 to restore production and business activities, MB has been proactively and actively restructuring debt repayment terms and providing debt relief for customers.
In an interview with VnEconomy, a representative of the National Payment Corporation of Vietnam (Napas) stated that due to the increasing consumer lending needs of the people to stabilize their lives after being affected by storms and floods, one of the methods to help people quickly access official consumer credit from banks and financial companies is to use domestic credit cards.
Through this method, people can spend first and pay later for essential living expenses, with a long interest-free period of 45 to 55 days, effectively supporting customers with sudden financial needs without having to resort to black-credit lending with high-interest rates. The procedure for opening a credit card account is simple, and the issuance and payment costs are low.
Currently, NAPAS credit cards issued by Vietnamese banks and financial companies include: Agribank, Vietinbank, Sacombank, ACB, NAB, HDBank, Vietbank, Baovietbank, VCCB, OCB, Viet A Bank, and four financial companies: Vietcredit, FCCom, Mirae Asset, and Mcredit.
PROMPT DEBT CLASSIFICATION TO PROVIDE BANKS WITH RESOURCES TO SUPPORT CUSTOMERS
As the main bank providing capital to the agricultural and rural sectors, as of September 20, Agribank recorded nearly 15,000 borrowing customers with an estimated affected debt of over VND 30,000 billion, and expected damaged debt of nearly VND 11,000 billion.
“For on-balance sheet loans, Agribank will base the interest rate reduction on the extent of the customer’s damage caused by Storm No. 3 and the floods, with a reduction of 0.5-2% per year and a waiver of 100% of overdue interest and penalty interest from September 6, 2024, to December 31, 2024. In addition, there will be a 0.5% reduction in the lending interest rate for new loans from September 6, 2024, to December 31, 2024.”
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In addition to the support solutions from the banks’ resources, Mr. Pham Toan Vuong proposed that the ministries and sectors study and provide some mechanisms and policies to support banks in consolidating their financial resources to serve businesses and people after the storms and floods.
First, quickly issue a mechanism for debt restructuring and repayment term extension while maintaining the original debt group for customers damaged by storms and floods, based on their cash flow (the term of debt restructuring is based on the customer’s cash flow and income source, not limited to the maximum according to the production and business cycle). There should be no limit on the disbursement time, and this policy should apply to debts due before June 30, 2025. Along with this, there should be a mechanism for provisioning and allocating appropriate risk provisions for credit institutions.
Second, the State Bank should provide uniform guidance on interest waivers and reductions for customers affected by storms and floods.
Third, it is proposed that the Government consider amending Decree 55/2015/ND-CP to create a mechanism to support customers in overcoming difficulties and restoring their operations so that they can have income to repay their bank debts. Debt restructuring and maintaining the original debt group should be based on the customer’s cash flow and income source, not limited to the maximum according to the production and business cycle. The beneficiaries of the debt restructuring and support policies under Decree 55 should include customers in the fields of industrial production, tourism, and construction and those in rural areas but with changed and rearranged locations due to urbanization.
“Vietcombank Stands Strong with its Customers: Overcoming Adversity Together”
As of the preliminary statistics, 34 branches of Vietcombank have been directly impacted by storms and floods, causing disruptions to their operations and services. The extent of the damage is still being assessed, but the bank is working diligently to resume full functionality as soon as possible.
