Prime Minister Directs Enhanced Measures for Credit Management in 2024
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Prime Minister Pham Minh Chinh has issued Directive No. 122/CD-TTg on November 27, 2024, instructing the State Bank of Vietnam to strengthen credit management measures for the year 2024.
Over the past months, under the leadership of the Party and the National Assembly, along with the decisive and timely direction of the Government and the Prime Minister, and in close coordination with ministries, sectors, and local authorities, the State Bank of Vietnam and the credit organization system have made significant efforts to closely monitor the situation and vigorously implement monetary and banking tasks and solutions. These efforts have contributed positively to the country’s socio-economic development thus far this year.
However, with the complex and prolonged international context, military conflicts in certain regions, slow and uneven global economic recovery, and the pervasive impact of natural disasters and climate change on many countries, Vietnam’s domestic production and business activities have encountered numerous challenges. Compounded by the severe damage caused by Storm No. 3 and recent floods in various provinces, accessing credit has become more difficult, and bad debts in the banking sector have increased.
To further enhance credit management effectiveness in 2024 and strengthen state management in the monetary and banking sector, thereby vigorously promoting economic growth and striving to achieve the highest possible targets in the socio-economic development plan for 2024, in line with the Party’s, National Assembly’s, and Government’s resolutions and conclusions, the Prime Minister requests the State Bank of Vietnam to take the lead in coordinating with relevant agencies to closely monitor international and regional developments and the policy adjustments of major economies. This proactive approach will enable timely and effective policy responses.
The State Bank of Vietnam, in coordination with monetary policy implementation agencies, shall proactively, flexibly, timely, and effectively manage monetary policy, working in harmony with reasonable and focused fiscal expansion and other macroeconomic policies. Particular emphasis will be placed on vigorously and effectively implementing tasks and solutions related to interest rate and exchange rate management, credit growth, open market operations, money supply, and reducing lending interest rates to provide capital for the economy at reasonable costs.
Additionally, the State Bank shall smoothly inject and withdraw money in a synchronized, reasonable, and non-disruptive manner, avoiding liquidity pressure on the banking system. These measures aim to support individuals and businesses in swiftly overcoming the aftermath of Storm No. 3, restoring and developing production and business activities, boosting economic growth, maintaining macroeconomic stability, curbing inflation, ensuring the economy’s major balances, and safeguarding the safety of banking operations and the credit organization system.
The State Bank, in coordination with relevant agencies, shall urgently implement effective and timely credit solutions aligned with macroeconomic and inflationary developments. These solutions will meet the capital needs of the economy, address difficulties faced by individuals and businesses, support production and business development, and create jobs and livelihoods for people. The spirit of harmonious interests, shared risks, mutual support, and effective and efficient capital allocation shall be upheld, ensuring that credit reaches the right beneficiaries at the right time and place, without bottlenecks, delays, or bureaucratic obstacles. The target credit growth rate for 2024 is set at 15%.
Furthermore, the State Bank shall continue to effectively and vigorously implement measures within its authority to reduce lending interest rates across the credit organization system, thereby supporting individuals and businesses in their production and business development, generating revenue and profits, and repaying bank loans.
The State Bank, in coordination with relevant agencies, shall direct credit institutions to focus on lending to production and business activities, priority areas, and economic growth drivers, including digital transformation, green transformation, climate change response, circular economy, sharing economy, science and technology, and innovation. Meanwhile, tight control will be maintained over credit granted to risky areas to ensure safe and efficient credit activities. Policies will be implemented to facilitate access to credit for businesses and individuals, with a focus on promoting lending for production, business, and consumer needs during the year-end and Tet holiday in 2025.
Efforts will be intensified to reduce lending interest rates by cutting costs, streamlining administrative procedures, enhancing information technology applications, and accelerating digital transformation.
Effective implementation of preferential credit packages tailored to the characteristics of each credit institution will be promoted, focusing on critical sectors that drive the economy’s growth in line with the Government’s policies. These include social housing, worker housing, and credit packages for forestry and aquatic products. The role and social responsibility of credit institutions will be emphasized, encouraging their support for individuals and businesses facing difficulties.
The State Bank, in coordination with relevant agencies, shall proactively review and compile a list of borrowers affected by Storm No. 3 to promptly apply support measures. These may include debt restructuring, interest rate reductions or exemptions, and new loans to restore production and business activities post-storm, in accordance with current regulations. Debt handling will be conducted for affected borrowers as per relevant guidelines.
The State Bank, in collaboration with relevant agencies, shall enhance inspection, supervision, and monitoring of credit granting and interest rate announcements by credit institutions. Violations will be promptly handled in accordance with regulations, and effective solutions will be implemented to address bad debts in the credit organization system.
The Prime Minister assigns Deputy Prime Minister Ho Duc Phoc to directly guide the State Bank of Vietnam and relevant agencies in performing the tasks outlined in this Directive.
The Government Office shall monitor, urge, and perform its functions, tasks, and powers in accordance with regulations.
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