Hanoi (VNS/VNA) - Governor of the State Bank of Vietnam (SBV) Nguyen Thi Honghas issued Directive No.01/CT-NHNN on organising the implementation of the keytasks of the banking sector, with a focus on improving credit quality andtightly controlling loans to potentially risky industries.

Accordingly,the Governor has required banks to take necessary measures for controllingcredit size and growth, focusing loans on production and priority fields inaccordance with the Government's policy to support economic recovery and development,while strictly controlling loans for potentially risky areas such as realestate, the stock market, Build-Operate-Transfer (BOT) and Build-Transfer (BT)transport projects.

Banksmust accelerate the implementation of measures to control and limit any newlyarising bad debts and maintain the bad debt ratio below 3 percent, theGovernor said, adding the SBV’s authorities would strengthen the inspection andsupervision of banks' operations, especially in the areas with high potentialrisks.

Accordingto the SBV, the banking industry this year might suffer a stronger impact ofbad debts due to the pandemic. If including debts, which had repayment termsrestructured or interest rates reduced according to the SBV’s Circular01/2020/TT-NHNN, the bad debt ratio of the banking system is about 7.31 percentto date.

Currentpolicies on restructuring and delaying the debt payment time are a temporaryand necessary solution in the short term, but extending the restructuring timewill be risky for the banking system in the medium term.

Underthe directive, the Governor also said it was necessary to continually implementmeasures to restructure credit institutions, especially weak ones, to help thebanking system operate healthily, effectively and transparently, meetinginternational standards.

Besides,the Governor has directed SBV’s agencies to manage the monetary policiesproactively and flexibly in order to control the inflation in line with theGovernment’s target of about 4 percent for 2022.

Accordingto the SBV, its monetary policy management in 2022 will be greatly influencedby inflationary pressure, especially in the context that a loose monetarypolicy has lasted for the past few years.

“Themeasures must contribute to maintaining macro-economic stability, supportingeconomic recovery, and adapting to international and domestic marketdevelopments,” the Governor noted. 

TheSBV sets the credit growth this year at 14 percent, but said it might beadjusted in accordance with the actual situation.

TheGovernor said the SBV would also continually promote non-cash payments anddigital transformation in banking operations./.