Deputy Governor of the State Bank talks about the loan to SCB

Finalizing the valuation of the three banks subject to mandatory acquisition.

At a press conference on banking performance results for the first quarter of 2024, leaders of the State Bank of Vietnam (SBV) provided information related to the trial of the Van Thinh Phat and Truong My Lan case, including violations by SCB.

According to Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, regarding SCB, a liquidity imbalance occurred from October 2022. The State Bank of Vietnam has the function and the law also stipulates that measures must be implemented to stabilize the bank and ensure the safety of the system.

In fact, SCB is not the first bank to do this, as there have been weak banks in the past, some of which had to be placed under special control and subject to mandatory acquisition. However, SCB is one of the banks with a large scale and total assets, so the solution to its problem must also be large enough to implement.

Mr. Tú informed that the State Bank of Vietnam is continuing to develop a roadmap for restructuring this bank step by step, urgently and actively researching to find solutions and mechanisms to create conditions for SCB to gradually stabilize, recover, and operate normally.

Among the measures to stabilize SCB, there are loans from the State Bank of Vietnam to weak commercial banks. The lending of money, whether in large or small amounts, has a mechanism for regulating the amount of money released through loans to SCB.

Deputy Governor Dao Minh Tu emphasized that the State Bank of Vietnam's stance is that all violations are caused by individuals. The government 's and the banking sector's policies and regulations on lending and management are already complete and clear.

Finance - Banking - Deputy Governor of the State Bank of Vietnam speaks about the loan to SCB. — Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, speaks at the press conference.

"These violations are due to the deliberate disregard of state regulations and must be held accountable under the law. The authorities have been and are strictly dealing with the individuals involved," Mr. Tú emphasized.

According to the Deputy Governor, the function of the Government and the Central Bank of each country is to have specific and timely solutions when commercial banks face difficulties, to ensure that those banks do not collapse, causing general repercussions for the financial system as well as the safety of commercial banking systems. Therefore, every country must have specific solutions.

The State Bank of Vietnam has completed the valuation process, which will be included in the restructuring plan for the three banks subject to mandatory acquisition in the near future.

Credit to the economy increased by 1.34% compared to the end of 2023.

Regarding the results of the first quarter's operations, the State Bank of Vietnam (SBV) stated that it continued to manage monetary policy to control inflation, support economic growth recovery, adapt promptly to domestic and international market developments, and maintain stability in the monetary and foreign exchange markets.

Regarding interest rate management, the State Bank of Vietnam (SBV) continues to maintain the policy interest rates after four downward adjustments in 2023, amidst persistently high global interest rates, creating favorable conditions for credit institutions to access capital from the SBV at low costs;

The government continues to encourage credit institutions to reduce costs in order to lower lending interest rates and support the economy. Deposit and new lending interest rates of commercial banks have decreased compared to the end of 2023.

Credit growth in March 2024 rebounded positively after declining in the first two months of the year due to seasonal factors. As of March 29th, credit to the economy had increased by 1.34% compared to the end of 2023.

The State Bank of Vietnam manages the exchange rate flexibly, helping to absorb shocks, combined with issuing VND treasury bills to reduce excess VND liquidity, thereby easing short-term pressure on the exchange rate.

Essentially, market liquidity is smooth, legitimate foreign exchange demands are fully met; exchange rates are moving in line with market conditions and the trends of international currencies against the USD.

Regarding the gold market, the State Bank of Vietnam is implementing measures to support the market, selling gold bars to increase supply through auctions.

Inspection and supervision of credit institutions continue to be strengthened, contributing to ensuring security and discipline in the monetary and banking market.

The State Bank of Vietnam (SBV) continues to proactively coordinate with relevant units to implement the assigned tasks in the Banking Sector's Action Plan for the "Restructuring of the Credit Institution System Associated with Handling Non-Performing Loans in the 2021-2025 Period" project, as directed by higher authorities. The legal framework for monetary and banking operations continues to be improved .

Source