The governor instructs banks not to divide cash dividend to focus resources on sharply reducing interest rates

07-Apr-2020 Intellasia | Vietnam Finance | 6:02 AM Print This Post

Regarding the Covid-19 epidemic, Governor Le Minh Hung asked banks to proactively review and cut operational costs, especially salary and bonus, also timely adjust business plans and financial plans in line with reality. Before the general meeting of shareholders, in the immediate future, no cash dividend would be distributed to focus resources on sharply reducing lending interest rates on current loans and new loans.

Governor of the State Bank of Vietnam (SBV) Le Minh Hung had issued Directive No. 02/CT-NHNN on urgent solutions of the banking industry to strengthen prevention and overcoming difficulties caused by the impacts of the Covid 19 epidemic.

The Governor said that the disease was still very complicated and unpredictable, continuing to affect the production and business activities and the lives of people significantly in the future. The task of preventing, fighting, and overcoming difficulties caused by the effects of epidemics was very urgent.

Through the directive, the head of the banking industry asked credit institutions to carry out earnestly, drastically and effectively tasks and solutions to prevent and combat the epidemic and support damaged customers following issued documents.

The Governor also asked credit institutions to proactively develop detailed business scenarios (including contingency business plans according to the evolution of the disease) to ensure business operations without interruption in any situation.

Along with that, banks were asked to develop a solution to provide banking services according to each scenario of the epidemic, under anti-epidemic measures of the government, the prime minister and local governments, at the same time, increase the supply of electronic banking services.

Governor Le Minh Hung emphasized that credit institutions should urgently issue and carry out internal regulations guiding the Circular No. 01/2020/TT-NHNN of SBV. Chair of the Board of directors, Board of directors, or general directors of credit institutions directly steered the implementation of restructuring the repayment term, exemption and reduction of interest and fees, keeping the same group of debts, lending new loans to customers facing difficulties, and being responsible to the Governor for implementation results.

In particular, institutions had to strictly handle units, leaders, and professional staff who implemented all these directives slowly, intentionally causing difficulties, troubles, irresponsibility, and improperly implementing them in the process of removing problems for customers.

The Governor instructed credit institutions to continue effectively implementing solutions to expand credit to production and business areas, priority areas, especially lending to maintain and restore the sector affected by the epidemic. Also, credit institutions had to strictly control credit quality for potential risk areas.

Notably, the Directive required credit institutions to proactively review and cut operational costs, especially salaries and bonuses, to promptly adjust business and financial plans in line with reality. Before holding the general Meeting of Shareholders, in the immediate future, no cash dividend would be allocated to focus resources to sharply reduce lending interest rates on current loans and new loans.

Besides, the Directive asked credit institutions to improve the management, administration and supervision capacity of the Board of directors/Board of Members, the Executive Board and the Supervisory Board for activities; strengthen the effectiveness of internal inspection and control, including focusing on inspecting and supervising the implementation of debt repayment restructuring, exemption, and reduction of interests and fees, keeping debt groups under Circular No. 01/2020/TT-NHNN.

The Governor also requested strengthening the coordination and information sharing among credit institutions to ensure a high consensus in implementing solutions to remove difficulties for customers, especially the solution to keep the debt group when restructuring loan repayment, exemption and reduction periods. Moreover, information about solutions, policies, programmes, packages of support products for borrowers had to be public proactively and timely to know and coordinate proper implementation.

Also, the Directive mentioned promoting non-cash payment, diversifying suitable credit programmes and products to support more actively with subjects and economic sectors; promoting administrative procedure reform, applying technology to limit direct transactions, creating favourable conditions to enhance access to credit for customers; continuing to carry out measures to prevent and control epidemics and remedies when the staff was infected with plagues, ensuring the operation of the banking system safely, smoothly and without interruption.


Category: Finance, Vietnam

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