This directive is outlined in telegram 128, issued on 6/8 by prime minister Pham Minh Chinh, concerning tasks and solutions to boost growth, control inflation, stabilize the macroeconomy, and ensure major economic balances.
The government leader has requested that the state bank of Vietnam promptly develop a roadmap and pilot program to eliminate assigned credit growth targets (credit limits) starting next year. The state bank should establish standards and criteria for banks to operate efficiently, adhere to safety ratios and maintain high credit quality indices, ensuring transparency.
The state bank is responsible for inspection, supervision, and post-inspection to prevent systemic risks, ensure system security and safety, and control inflation according to targets.
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Transactions at VIB bank. Photo: Giang Huy |
Transactions at VIB bank. Photo: Giang Huy
Last month, at a government meeting with localities on socio-economic development, the prime minister also called for the early elimination of administrative tools in managing credit growth.
The credit limit mechanism, maintained by the state bank for the past decade, serves as a tool to control loan quality and support macroeconomic objectives such as interest rates, money supply, and inflation. However, this tool is now criticized for creating a request-approval mechanism, sometimes preventing borrowers from accessing credit if banks have exhausted their "quota."
In reality, the state bank is gradually reducing and moving towards eliminating credit limits for individual banks. Last year, the governing body removed credit limits for branches of foreign banks. For the remaining credit institutions, they are reviewing and gradually removing these limits.
In addition to piloting the removal of credit limits, the monetary authority is tasked with increasing inspections and implementing measures to prevent and strictly penalize manipulation, cross-ownership, and lending to related businesses. The banking sector will continue to reduce costs, simplify administrative procedures, and enhance digital transformation to create more room for reducing lending interest rates.
Furthermore, preferential policies need review to implement credit programs for young people under 35 to buy or rent social housing, and the 500,000 trillion VND package for infrastructure, science, technology, innovation, and digital transformation.
Vietnam aims for GDP growth of over 8% this year. In recent government meetings, prime minister Pham Minh Chinh has urged efforts to achieve 8.3-8.5% growth this year, ensuring double-digit growth in the coming period. The Ministry of Finance is tasked with managing fiscal policy towards reasonable expansion, price control, and inflation management. Simultaneously, they must accelerate public investment disbursement, mobilize and utilize FDI, foreign loans, and research issuing appropriate bonds for key projects.
The Ministry of Industry and Trade will increase solutions to boost domestic consumption and production, develop key industrial sectors with high added value, and reduce reliance on imported materials. They must decisively address lingering power projects in August, ensuring energy security.
The Ministry of Construction will implement solutions to stabilize supply and demand, manage prices, and increase consumption of domestically produced construction materials. This agency needs to develop specific plans to enhance the effectiveness of social housing construction and implement railway projects connecting with China, Central Asia, and Europe.
Phuong Dung
