Awarding the right to decide on special lending at 0% interest rate/year, no need for collateral
The State Bank of Vietnam (SBV) may be given the right to decide on special lending at an interest rate of 0%/year, without collateral, if the draft Law amending and supplementing a number of articles of the Law on Credit Institutions (CIs) is passed by the National Assembly at the upcoming 9th Session.
According to information from the SBV, this amendment aims to thoroughly decentralize and delegate authority, helping monetary policy management agencies to promptly handle system risks, especially for weak credit institutions, without having to go through many intermediaries as before.
Currently, special lending with 0% interest rate/year or without collateral is still under the authority of the Prime Minister. However, at the Government meeting in March 2025, the Government agreed on the policy of transferring decision-making rights to the SBV, to ensure flexibility, speed, and efficiency in operating the financial - banking system.
Previously, Deputy Prime Minister Ho Duc Phoc also directed in Official Dispatch No. 2923/VPCP-KTTH dated April 8, 2025, requesting the SBV to "urgently study and propose amendments to regulations on special lending authority" and emphasizing the principle of decentralization and delegation of authority along with ensuring security and safety of the system.
Support weak banks, reduce the risk of system failure
The "special lending" mechanism is one of the important tools for the SBV to support liquidity for credit institutions at risk of temporary inability to pay. However, complicated processes and long time have caused the support to not be effective, and in some cases, it has been out of control.
With the proposed new mechanism, the SBV can directly make special lending decisions in emergency situations, shorten response times, and reduce the risk of spreading risks in the system.
In addition, the bill also emphasizes the principle of ensuring efficiency and feasibility, preventing negativity, loss, waste, and violations of the law.
Major changes in handling banking risks
The granting of additional rights to the SBV is included in the overall efforts to "build and perfect the socialist rule-of-law state", in the spirit of Resolution No. 27-NQ/TW of the Central Committee.
This draft law is expected to be a turning point in the mechanism for handling weak credit institutions, while creating a more complete and clear legal basis for system support intervention, especially when the economy is aiming for 8% growth in 2025.
