On the morning of May 29, the National Assembly discussed in the hall the draft Law amending and supplementing a number of articles of the Law on Credit Institutions (CIs).
Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong explained and clarified a number of issues raised by National Assembly deputies.
Regarding adjusting the authority to provide special loans without guaranteed assets, the 0% interest rate from the Prime Minister to the SBV, Governor Nguyen Thi Hong said that the old law stipulates that special loans are implemented according to the SBV's regulations.
From there, the SBV will have regulations on collateral assets (with or without), interest rates (with or without). However, the 2024 amended law gives the Prime Minister the authority to provide this special loan.
According to the Governor, in the reality of the constant changes in the system of credit institutions in the world and Vietnam, issues related to liquidity and withdrawals from people only require people to go to banks or even withdraw money at home electronically... so issues that need to be handled quickly need to be raised.
Regarding lending without guaranteed assets, the Governor said that this is not a regular, continuous matter, only in special cases.
"The 2024 Law on Credit institutions has provided many regulations for early and remote detection. Any credit institutions with problems need to be put into early intervention. If there is a lack of liquidity to borrow from the State Bank but have to pay interest, it is not "not yet borrowed with 0% interest", the Governor affirmed.
The Governor affirmed that special loans are only applied to mass withdrawals, because if there are mass withdrawals, they can spread throughout the system. And when the credit institutions have developed a plan, the SBV will lend.
When lending on special terms (not subject to 0%, not special assets), current regulations always require assets to be guaranteed in advance, only when committing to having guaranteed assets will it be applied.
It is not just that special lending is not without guaranteed assets, the Governor concluded and said that these credit institutions are in a difficult situation and should lend 0% so that they can soon overcome the difficulties.
The Governor gave an example in 2022, the banking system had to withdraw money in large numbers at some banks, and the SBV had to work overnight and day to review the lending records of credit institutions to take valuable documents invested by credit institutions such as bonds, stocks, etc. as collateral.
Regarding the condition of applying a loan interest rate of 0%, the Governor said that when credit institutions fall into a very difficult situation, lending at a special interest rate of 0% is to ensure the safety of the system. In the recent 0 VND bank restructuring project, the SBV also applied special loans, mostly lending at 0% interest rates.
Therefore, the Governor believes that the risk often does not come from the weakness of credit institutions, but sometimes due to rumors, technological problems... it leads to mass withdrawals. And when this problem occurs, it needs to be handled very quickly.
"We require credit institutions to have internal procedures to ensure transparency in asset seizure and to comply with legal regulations," said the Governor.
