Governor Nguyen Thi Hong recalls 'unforgettable' moment related to SCB

On the afternoon of October 28, Governor of the State Bank of Vietnam Nguyen Thi Hong explained to the National Assembly. After answering questions about high interest rates, Ms. Hong recalled an "unforgettable" moment.

Governor of the State Bank of Vietnam Nguyen Thi Hong - Photo: GIA HAN

Regarding the opinion of some delegates that interest rates are still high, Ms. Hong said: "Businesses that borrow always want low interest rates. Compared to the wishes of businesses, the opinion that interest rates are high is always correct and understandable."

World interest rates are very high, Vietnam can control them

However, the Governor of the State Bank of Vietnam hopes that delegates will share and acknowledge the achievements that the State Bank as well as credit institutions in the system have achieved in the recent past.

Ms. Hong said that in the context of very high international interest rates, Vietnam's interest rate level is under control, new loan interest rates have decreased by about 3% compared to the period from early 2022 to present.

Especially when businesses are in difficulty, banks also spend their own financial resources to waive interest rates for businesses and people. This figure is estimated to be up to 60,000 billion VND.

"In its management, the State Bank always directs credit institutions to save operating costs to continue reducing lending interest rates, supporting businesses and people.

"Increasing simplification of loan procedures to save time and resources for businesses and people," Ms. Hong added.

Regarding the assessment that businesses still have difficulty accessing real estate credit, Ms. Hong said that investment capital in the real estate market often requires large value and long term, so it is necessary to mobilize from many channels, of which bank capital is one channel.

According to regulations, credit institutions approve credit to customers with loan terms and interest rates.

Unlike normal businesses, credit institutions, in addition to doing business according to their own purposes, must always ensure safety ratios according to regulations of the State Bank.

At the same time, ensure capital recovery to be ready to pay capital to depositors. Otherwise, it will cause business disruption, affecting the safety of the system and the economy.

Therefore, even if there is a feasible project with the ability to repay the debt, the bank still refuses to lend because the loan term of this project may not be suitable for the bank's capital balance capacity. Or it may be because the bank prioritizes capital for other urgent goals to ensure the safety of the banking system.

However, according to Ms. Hong, in recent times, real estate credit has increased very rapidly. This growth rate is often higher than the general credit growth of the economy.

Currently, outstanding real estate credit is up to 3.15 million billion VND, equal to about 20% of the total outstanding debt of the economy.

"Unforgettable" moment

Real estate projects are still waiting for easy access to loan capital - Photo: NGOC HIEN

The Governor of the State Bank recalled the "unforgettable" moment of the mass withdrawal incident from October 6, 2022 at Saigon Commercial Joint Stock Bank (SCB).

This was an unprecedented large-scale mass withdrawal that had a ripple effect on the liquidity of credit institutions and the confidence of foreign investors. The exchange rate then increased by up to 10%.

At that time, the State Bank must set the highest goal of ensuring system safety, specifically ensuring the ability to pay depositors to avoid financial crisis.

"I remember that the October 2022 National Assembly session required that the highest priority be given to each time, so the State Bank increased interest rates in October and did not loosen credit room, and implemented all measures to ensure liquidity for the system.

Then, when the credit liquidity of the whole system improved by December of that year, the State Bank loosened the credit room. That brought about the stability until today," Ms. Hong recalled.

The Governor of the State Bank said: "At that time, credit institutions themselves were very concerned because people would withdraw money from their credit institutions, so credit institutions were also very cautious when making new loans, especially for long-term real estate projects."

State Bank studies additional credit packages for social housing development

Regarding credit for the social housing program, Governor Nguyen Thi Hong said that to achieve the goal of developing social housing still depends heavily on the State's financial resources.

Recently, in the context of not being able to allocate much budget, commercial banks have had credit packages responding to the program aiming to build 1 million social houses by 2030.

From there, the 120,000 billion package has now increased to 145,000 billion VND. This is capital from credit institutions mobilized from the people.

However, due to the preferential nature of loans, credit institutions use their resources to reduce interest rates by 1.5% - 2% for a period of 3 years for investors and 5 years for people.

Currently, the remaining disbursement balance is still very small, about 1,700 billion VND. However, according to Ms. Hong, this is only the first phase of the project implementation, with 10 years left, so it is necessary to survey the demand for home ownership or rental, to have appropriate credit solutions for this social housing development project.

Source: https://tuoitre.vn/thong-doc-nguyen-thi-hong-nhac-lai-thoi-diem-khong-the-quen-lien-quan-scb-20241028174740704.htm