Extending Circular 02 for another 6 months will help businesses reduce financial pressure and repay loans - Photo: NGOC HIEN
Talking to Tuoi Tre, financial experts said that extending debt repayment will help banks avoid having to set aside provisions, affecting profits, while at the same time giving businesses more time to repay their debts.
However, experts warn that solutions are needed to increase loan quality, businesses will really get stronger, and avoid the risk of bad debt ratios suddenly increasing and debts jumping groups when this circular expires at the end of the year.
* Associate Professor, Dr. Nguyen Huu Huan (senior lecturer, Ho Chi Minh City University of Economics):
Bad debt ratio will increase when circular 02 expires
The economic situation is still difficult, with slow recovery both domestically and internationally, leading to the debt repayment capacity of enterprises being affected. As a result, bad debt is on the rise throughout the banking sector, which could create a wave of asset foreclosures as well as a wave of corporate bankruptcies.
Therefore, extending Circular 02 helps banks have more time to deal with and handle bad debts and also helps businesses access capital and have appropriate debt repayment plans. When the economic situation improves, businesses will be able to repay their debts.
However, besides the positive side, this policy also has a negative side as it acts as a "veil to cover bad debt" because the scale and ratio of bad debt will actually be "hidden" because it does not have to be paid yet, and the debt groups will remain the same.
If the State Bank does not extend the circular by the end of this year, the bad debt ratio could increase significantly, even double or triple the current figure if businesses still cannot increase cash flow and business efficiency has not improved. This could cause a psychological shock to investors and people, creating potential risks for the banking system.
The way we are currently handling bad debt is like cooling an overheated engine, but it also affects the temperature gauge. However, in general, debt extension is still the best temporary solution at present, because with the current potential of enterprises, the real estate situation is still difficult, it is very difficult to handle bad debt and it is difficult to find a more optimal solution.
By the end of this year, if the business situation is still not positive, the State Bank will definitely have to consider the option of continuing to extend the circular. However, I predict that the peak of bad debt will fall in the third quarter of this year and will remain high, then tend to decrease if there is an extremely important factor: economic recovery. These are also the conditions to gradually tighten the handling of bad debt.
* Associate Professor, Dr. Dinh Trong Thinh (financial expert):
Require banks to manage risks and make appropriate provisions
The extension of Circular 02 is a positive solution for both businesses and banks. For businesses, the Circular helps prevent unpaid debts or debts at risk from being transferred to bad debts or jumping debt groups, while businesses still have access to loans from the banking system. From there, businesses still have capital to continue doing business, restructure effectively, and still have resources to pay debts and interest to banks.
The bank also benefits, because when the debt is deferred, the bank does not increase the debt group, does not have restrictive measures, the bank still disburses, helps businesses overcome difficulties, helps businesses repay debts, the bank somewhat reduces the risk of losing interest, losing principal...
However, there is a danger when applying this policy, that is, besides the enterprises actively taking advantage of the policy as mentioned above, there will also be enterprises that cannot take advantage of the opportunities from this capital source. If banks continue to lend, it will increase the burden on the enterprises themselves, bad debt will also increase, leading to the risk of losing capital.
Obviously, this policy has positive aspects, so both businesses and banks are looking forward to debt deferral. However, to promote the positive aspects of the policy, businesses must restructure themselves, use capital effectively, and set goals for debt and interest repayment.
At the same time, banks must also monitor and supervise enterprises, correctly assessing which enterprises are capable of recovery, and are able to repay loans and interest to support enterprises in the restructuring process as well as provide capital for production and business. This will create a sustainable position for both sides.
The State also needs to inspect and supervise enterprises to properly implement State regulations and relevant authorities also need to create maximum conditions for enterprises to produce, trade and consume products, helping enterprises recover.
In particular, the State Bank and the Government need to require banks to manage risks and make appropriate provisions to avoid a sudden increase in bad debt in the coming time, affecting banking operations and even posing risks to the entire system.
* Mr. Le Viet Hai (permanent vice president of Vietnam Association of Construction Contractors - VACC):
Hope to hear from you soon
In fact, real estate enterprises are still facing many difficulties, the ability to pay debts to contractors is still very slow, many enterprises have not yet balanced cash flow to continue implementing projects. Many projects are still at a standstill, not yet built. Therefore, extending and deferring debts will reduce difficulties for enterprises.
Currently, contractors are still facing great financial difficulties, some enterprises are facing serious difficulties. Therefore, enterprises want this debt deferral policy to be extended for another year, until mid-2025. However, if this circular is extended, it should be announced about 2 months before the deadline, for example, in April 2024 instead of June 2024, because at that time, enterprises will have a hard time with debts that are due for payment.
In addition, the enterprises themselves must also make great efforts to improve their finances, repay principal and interest. For example, our enterprise must issue shares to subcontractors to reduce debt repayment pressure, sell machinery and equipment, etc. Enterprises must also promote restructuring.
In the real estate sector, we recommend that the authorities quickly come up with specific solutions to promptly remove legal obstacles for projects, helping the market recover so that businesses have stable financial flows.
Source: https://tuoitre.vn/gia-han-no-can-than-no-xau-an-minh-20240623232822045.htm
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