Special Lending at 0% Interest Rate ‘Poses No Risk’
On the morning of June 10, the National Assembly’s Standing Committee discussed the absorption, explanation, and editing of the draft Law amending and supplementing a number of articles of the Law on Credit Institutions.
In the absorption and explanation report, Governor of the State Bank Nguyen Thi Hong provided information on the policy group transferring the authority to decide on special lending of the State Bank, with an interest rate of 0%/year, unsecured.
Governor of the State Bank, Nguyen Thi Hong. Photo: National Assembly |
Regarding the source of funds for special lending and the mechanism to control it, Ms. Hong stated that the special lending by the State Bank is made from the source of money to perform the function of the central bank on money issuance, not using the source of money from the state budget. Therefore, the State Bank’s special lending at 0% interest rate does not pose a risk that the state budget has to subsidize interest rates.
“However, following the opinions of the National Assembly deputies, the Government directs the presiding agency to continue reviewing and coordinating with relevant agencies to review the provisions on handling the State Bank’s special loans under the regulations on the financial regime of the State Bank,” Ms. Hong said.
The Governor also emphasized that special lending is only applied in two cases: credit institutions are withdrawn consecutively (to pay depositors); and special lending to implement the plan for recovery and compulsory transfer of specially controlled credit institutions. This plan is only applied after the State Bank’s professional measures such as refinancing and open market operations have been implemented…
“Thus, the State Bank’s special lending activity is necessary to prevent the phenomenon of consecutive withdrawals at credit institutions and to limit the risk of contagion to other credit institutions or to support the recovery plan, the compulsory transfer plan to restructure specially controlled credit institutions,” Ms. Hong said.
The Governor also affirmed that the special lending activity aims to ensure the safety of the credit institution system, social order and safety, and does not aim to create a competitive advantage for the borrowing credit institutions.
Governor Nguyen Thi Hong said that the Law on Credit Institutions of 2024 assigned the Governor of the State Bank to detail the special lending. Implementing this regulation, the Governor has issued Circular No. 37 to detail the special lending; thereby, concretizing the purpose, amount, term, secured assets, conditions for secured assets, debt repayment, and responsibilities of related parties…
However, following the opinions of the National Assembly deputies, Ms. Hong said that after the draft law is issued, the State Bank will research, review, and amend Circular No. 37 related to criteria and conditions for special lending at an interest rate of 0%/year, unsecured, purpose of loan use, etc.
Urgent Request for Competent Authority’s Opinion
Regarding this content, Chairman of the Economic and Financial Committee Phan Van Mai assessed that the provisions on the State Bank’s special lending interest rate are important, affecting the stability of the credit institution system, the country’s financial and monetary security, and the resources of the economy.
 Delegates at the meeting. Photo: National Assembly |
As there are different interpretations among agencies, the Committee has sent a document to the Standing Committee of the Law Committee and the Judiciary Committee to summarize and report to the Standing Committee of the National Assembly Party Committee for the opinion of the competent authority on this content.
“The Economic and Financial Committee proposes that the drafting agency continue to improve the provisions on the interest rate of special lending on the basis of the opinion of the competent authority,” said Mr. Mai.
At the meeting, National Assembly Chairman Tran Thanh Man agreed with the delegation of authority for special lending from the Prime Minister to the State Bank. At the same time, the National Assembly Chairman also agreed with the editing option to remove the transitional regulation for special loans decided by the State Bank before this law takes effect.
Regarding the interest rate for special lending, the Economic and Financial Committee has sent a document to the Standing Committee of the Law Committee and the Judiciary Committee. The National Assembly Chairman requested an urgent report to the Party Committee of the National Assembly for the opinion of the competent authority, as a basis for the agencies to continue improving the provisions on the interest rate for special lending.
Luân Dũng
– 11:35 10/06/2025
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