Chỉ thị 02/CT-NHNN

DIRECTIVE

URGENT MEASURE OF BANKING INDUSTRY FOR CONTRIBUTION TO COVID-19 CONTROL EFFORT AND ALLEVIATION OF DIFFICULTIES CAUSED BY COVID-19

In response to the negative effects of Covid-19 pandemic on Vietnam’s economy, the banking industry has prepared various plans for epidemic prevention and control to ensure safe, continuous and effective operation of the banking system. State Bank of Vietnam (SBV) has implemented various measures such as flexible use of monetary policies, exchange rates, debt rescheduling, interest reduction and cancellation, retention of debt category, reduction of interest rates to assist business, fee reduction and cancellation. These measures have been assisting borrowers overcoming their difficulties. The whole banking industry has contributed over 160 billion VND for epidemic prevention and control.

The pandemic is still unpredictable and will keep significantly affecting business and life. Epidemic control and assistance measures are urgent. Pursuant to directives of the Politburo, Secretariat and the Prime Minister on the climax stage of epidemic prevention and control, the Governor of SBV hereby requests that the units of SBV, credit institutions and foreign bank branches (hereinafter referred to as “credit institutions”), public service providers, affiliated enterprises and banking associations fulfill the following objectives:

I. General objectives

1. The entire banking industry shall continue support the “war” against Covid-19 with determination and uniformity among SBV and credit institutions; effectively implement urgent measures for epidemic prevention and control and alleviate difficulties caused by Covid-19.

2. Focus on complete and effective implementation of the measures specified in the Politburo’s Notice No. 172-TB/TW dated 21/3/2020, the Secretariat’s Document No. 79-CV/TW dated 29/01/2020, the Prime Minister’s Directive No. 11/CT-TTg dated 4/3/2020, Directive No. 13/CT-TTg dated 11/3/2020 and Directive No. 15/CT-TTg dated 27/3/2020, SBV Governor’s Telegram No. 02/CD-NHNN dated 11/3/2020, and Circular No. 01/2020/TT-NHNN dated 13/3/2020. Stay updated on the epidemic situation to effectively implement epidemic prevention and control measures and ensure safe and uninterrupted operation of the banking system.

3. Achieve the objectives in Directive No. 01/CT-NHNN dated 03/01/2020 of SBV’s Governor; focus on the solutions for inflation control, stabilization of the currency market and macroeconomics; concentrate credit extension on prioritized business lines; provide adequate capital for the economy, especially restoration of production in the industries affected by the pandemic.

4. Leaders, officials and public employees in the banking industry shall have responsibility, discipline and cooperation; provide assistance through monetary, credit and social security activities.

II. Units of SBV

1. Frequently forecast and assess the impacts of Covid-19 on the economy; stay updated on the domestic and foreign market to make timely adjustments to monetary and credit policies; uniformly and flexibly implement monetary policies and regulate open market operation with reasonable terms, volumes and interest rates; plan provision of assistance where necessary to sustain market liquidity; provide adequate capital; reduce loan interest; assist in economic growth and inflation control.

2. Provide refinancing loans for credit institutions to run the programs of the Government and the PM; assist in restructuring of credit institutions and bad debt settlements on the basis of special bonds issued by VAMC; on-lending according to credit profiles; provide loans secured with valuable papers and other refinancing forms as prescribed.

3. Closely monitor the market developments; adjust the official exchange rate in a flexible and appropriate manner; keep implementing various measures and monetary policies to stabilize the currency market. Interfere in the market where necessary to stabilize the currency market and contribute to macroeconomic stabilization.

4. Regulate interest rates according to macroeconomic balance, market developments and purposes of monetary policies; closely supervise the reduction in interest rates by credit institutions as requested by SBV and the Government to assist businesses overcoming difficulties.

5. Request credit institutions to focus credit extension on prioritized industries and business lines; constantly monitor and assess impacts of the pandemic on overall credit growth, which is the basis for adjusting credit-related targets of credit institutions, provide adequate capital for businesses, especially in industries affected by the pandemic; enable borrowers to take new loans to resume production; maintain close control of credit extension in risky industries.

6. Directly discuss with Chairpersons of the Member assemblies/Board of Directors/General Directors of credit institutions about effective implementation of measures for assisting borrowers affected by the pandemic, such as: debt rescheduling, cancellation or reduction of interests on existing loans, debt category retention according to Circular No. 01/2020/TT-NHNN , and grant new loans at concessional interest rate; frequently update the implementation of these measures by credit institutions.

7. Carry out periodic and unscheduled inspections of implementation by credit institutions; supervise the implementation of Circular No. 01/2020/TT-NHNN , regulations on exemption and reduction of electronic payment fees and relevant legislative documents; make timely revisions to regulations and policies to complete the legal framework and resolve difficulties encountered by credit institutions and their clients during the implementation.

8. Cooperate with specialized units of the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Labor, War Invalid and Social Affairs and relevant agencies in developing and implementing plans for use of monetary and credit policies to assist in epidemic control after being approved by competent authorities.

9. Cooperate with specialized unit of the Ministry of Finance in proposing increase in charter capital of state-invested commercial banks to the Ministry of Finance.

10. Review existing regulations and issue new regulations on application of technology to reduce physical contact during banking transactions. Cooperate with other Ministries and agencies in completing the draft Decision on pilot application of Mobile Money and the draft Directive on encouragement of cashless payment in Vietnam; submit those drafts to the Prime Minister for promulgation

11. Devise scenarios to ensure continuous operation of SBV units and departments; safety of all operations, especially managerial tasks, transactions on the foreign currency and VND market, payment and information technology system of SBV.

12. Enhance communication by SBV; cooperate with credit institutions in timely communication of policies and implementation results of the banking industry.

III. Branches of SBV in provinces (hereinafter referred to as “SBV branches”)

1. Enhance performance of the roles of regulatory bodies in banking operations in their provinces; provide guidance on implementation of measures for assisting borrowers affected by Covid-19 in their provinces as requested by SBV Governor and the People’s Committees of provinces.

2. Constantly supervise the implementation of these measures by credit institutions in their provinces; Carry out unscheduled inspection on implementation of regulations on debt rescheduling, interest reduction and cancellation, retention of debt category, reduction of interest rates for borrowers affected by Covid-19; take responsibility to the Governor for the outcomes. Take actions against failure to comply with regulations of the Government, the PM or the Governor, delay, harassment and irresponsibility in implementation of measures for assisting borrowers. Make sure the policies are not taken advantage of or misused.

3. Cooperate with relevant Departments and agencies in understanding impacts of the pandemic on various industries; Advise the People’s Committees of the provinces providing assistance for businesses, especially medium and small enterprises, household businesses, manufacturers of essential consumables, prioritized industries.

4. Publish information about the credit policies, programs and solutions of the banking industry; Resolve difficulties and report the cases beyond their competence to the Governor and the People’s Committee of the province.

5. Director of SBV branches shall organize the implementation of the urgent measures and policies of the banking industry in this Directive and relevant documents. Any SBV branch Director that fails to fulfill his/her tasks will face serious consequences. This is the basis for annual performance assessment of by SBV.

IV. Credit institutions

1. Fully and effectively implement epidemic prevention and control and provide assistance for borrowers affected by Covid-19 in accordance with this Directive, Notice No. 35/TB-NHNN dated 07/02/2020, Telegram No. 02/CD-NHNN dated 11/3/2020, Circular No. 01/2020/TT-NHNN dated 13/3/2020 and other directives of SBV on payment fee reduction and exemption. Implement subsequent directives of the Governor and relevant agencies.

2. Construct business scenarios (including backup plans according to the epidemic situation) in order to ensure uninterrupted operation in any situation. Find solutions for provision of banking services in each epidemic scenario; ensure conformity with the measures of the Government, the PM and local authorities; enhance provision of online banking services.

3. Issue internal rules and regulations on implementation of Circular No. 01/2020/TT-NHNN of SBV. Chairpersons of the Member assemblies/Board of Directors/General Directors of credit institutions shall directly supervise the debt rescheduling, cancellation and reduction of interests and fees, debt category retention and grant of new loans to borrowers affected by Covid-19, and take responsibility to the Governor for the outcomes. Take actions against delay or harassment by their units, managers and employees in provision of assistance for their clients.

4. Effectively implement solutions for credit expansion in various business lines and prioritized industries, especially grant of loans to maintain and restore the industries affected by the pandemic. Strictly control the credit quality in risky industries.

5. Reduce operating costs, especially payment of wages and bonus, adjust business plans and financial plans before holding the general assembly of shareholders; suspend paying dividends in cash to focus on reduction of loan interests on existing loans and new loans.

6. Improve the management and supervision capacity of Board of Directors/Board of Members, Executive Board and Board of Controllers of credit institutions. Improve effectiveness of internal inspections, including inspection and supervision of debt rescheduling, cancellation and reduction of interests and fees, debt category retention according to Circular No. 01/2020/TT-NHNN ; take action against misuse of these policies for profiteering or falsely reflect the credit quality. Submit weekly report to SBV on the implementation of the assistance measures specified in Circular No. 01/2020/TT-NHNN.

7. Enhance cooperation and exchange of information between credit institutions to ensure uniform implementation of the measures for assisting clients, especially debt category retention when applying debt rescheduling, interest cancellation or reduction, etc. Provide clients with complete and timely information about the assistance policies, programs and packages to ensure cooperation.

8. Enhance cashless payment; diversify credit products and programs to assist various users and industries; enhance administrative reform; apply new technology to avoid physical contact; improve accessibility of credit; keep implementing epidemic prevention and control measures; respond properly when an employee is infected to ensure safe and uninterrupted operation of the banking system.

9. Keep participating in and encouraging employees in the entire system of credit institutions to have social security in order to support other industries and the people recover after the pandemic ends.

10. Chairpersons of the Member assemblies/Board of Directors/General Directors of credit institutions shall be fully responsible for to the Governor for effective and timely implementation of policies and urgent measures of the banking industry in an effort to contribute to Covid-19 control effort and alleviate difficulties caused by Covid-19. SBV will take serious actions against people and group of people who act irresponsibly, cause delay or harassment during implementation of these measures, or violate applicable regulations. SBV will also reward credit institutions that well implement these policies.

V. Banking associations shall keep playing the role in connecting credit institutions; ensure their cooperation in interest reduction or cancellation, debt rescheduling, grant of new loans, etc. to assist borrowers affected by Covid-19. Public service providers and enterprises in the banking industry, within the scope of their operation, shall assist SBV units and credit institutions in implementing these policies.

VI. IMPLEMENTATION

1. This Directive comes into force from the day on which it is signed.

2. SBV units, SBV branches shall organize the implementation of the tasks specified in this Directive within the scope of their operation; submit monthly reports to the Office of SBV.

3. The Office of SBV shall take charge and cooperate with the Credit Department, Monetary Policy Department, Bank Supervision and Inspection Agency and relevant SBV units in monitoring the implementation of this Directive, and submit a consolidated report to the Governor of SBV.

4. Heads of SBV units, Directors of SBV branches, Chairpersons of Boards of Directors, Board of Members, General Directors/Directors of credit institutions and banking associations are responsible for the implementation of this Directive./.