Keep the currency market safe

In order to effectively manage the operations of the entire sector and each credit institution in the province, the State Bank of Vietnam - Thanh Hoa Branch (SBV Thanh Hoa) has strengthened the inspection and examination of monetary activities in the area, especially the implementation of regulations on interest rate support loans, loans at agreed interest rates, foreign exchange management and some credit institutions with potential risks. Thereby, contributing to ensuring operational safety, improving the efficiency and effectiveness of State management in the monetary and banking sector.

Customers transact at Agribank Thanh Hoa.

Along with the socio-economic development, financial and banking activities are very active in the province. Credit institutions are growing rapidly in scale and diversifying products and services. As of the end of July 2024, the province had 119 credit institutions, including 35 commercial bank branches, 1 social policy bank branch, 1 development bank branch, 1 cooperative bank branch, 1 microfinance organization, 2 branches of Tinh Thuong microfinance organization, 67 People's Credit Funds (QTDND) and 11 financial companies. However, currency trading activities are inherently risky, while many policies have revealed many shortcomings, not keeping up with the market, causing banking activities to face many difficulties and challenges. Therefore, one of the important solutions to minimize risks to monetary and banking activities is to pay attention to and focus on inspection and supervision.

The supervision work has focused on activities with high potential risks. Through the supervision work, the State Bank has issued many documents directing, warning, and correcting a number of contents related to the operations of credit institutions, in which credit institutions are required to seriously implement the State Bank's instructions on the operations of credit institutions, consulting activities, insurance agents, and corporate bond investment; proactively assess, identify early, take measures to prevent, stop, control, and limit risks arising from credit granting activities throughout the system. At the same time, strictly prohibit the granting of credit in violation of legal regulations, granting credit with preferential interest rates in violation of regulations; proactively and immediately implement measures to improve credit quality, classify debts, set up and use risk reserves in accordance with legal regulations and a number of other issues; strengthen measures to prevent and control violations that cause bad debts at credit institutions.

In the first 7 months of 2024, the State Bank of Thanh Hoa conducted dozens of inspections at credit institutions. Through inspections, common errors were mainly related to loan application procedures, loan appraisal, collateral, debt classification, risk provisioning, bad debt handling, etc. In general, most of the violations were not subjective or intentional, but were often errors in the process of operation or due to the staff directly involved not fully understanding the profession. Therefore, the errors did not cause serious consequences and were all promptly corrected.

Customers come to make transactions at Vietcombank Bim Son Thanh Hoa.

The inspection and examination create healthy competition among banks, ensuring the legitimate and legal rights and interests of customers. The State Bank of Thanh Hoa has also directed, managed and monitored credit institutions in the area to implement the restructuring plan associated with bad debt settlement in the period of 2021-2025. In particular, focusing on implementing solutions to direct handling, rectify and monitor the results of remediation according to the approved restructuring plan for weak People's Credit Funds and some funds with violations in operations from previous years. Specifically, the State Bank of Thanh Hoa continues to carry out special control in accordance with the provisions of law for Saigon Commercial Joint Stock Bank, Hoang Dong People's Credit Fund, Hoang Trinh People's Credit Fund (Hoang Hoa), Van Son People's Credit Fund (Trieu Son), and is implementing the procedures for bankruptcy settlement (phase 1) under the direction of the Governor of the State Bank of Vietnam for Hoang Dong and Hoang Trinh People's Credit Funds.

With drastic solutions, the work of handling weak People's Credit Funds has achieved many positive results, the operations of People's Credit Funds have been basically stable in recent times, many shortcomings and limitations have been discovered and promptly corrected. By the end of July 2024, the total overdue debt of commercial banks and the People's Credit Fund system in the area was VND 1,643 billion, accounting for 0.8% of total outstanding debt.

It can be seen that the inspection and supervision work has been contributing to bringing practical efficiency to monetary and banking activities in the province. Especially in the last months of the year, credit balances have grown rapidly, credit transactions have increased sharply, the demand for cash of businesses and people has increased, posing many potential credit risks, requiring the inspection, supervision and supervision of credit activities at credit institutions to be carried out seriously and strictly. Therefore, in the coming time, the State Bank of Thanh Hoa will continue to focus on promoting the inspection, supervision and supervision of compliance with legal regulations on the banking sector, ensuring that capital is lent for the right purpose, to the right subjects, keeping the monetary market safe, limiting risks and controlling bad debts safely.

Article and photos: Minh Ha

Source: https://baothanhhoa.vn/giu-an-toan-thi-truong-tien-te-221166.htm