Banking & Finance

The State Bank of Vietnam (SBV)’s administrative reform plan for the 2021-2025 period aims to provide public administrative services online 24/7; digitize 100 per cent of administrative procedures; achieve a level of satisfaction of over 90 per cent among individuals and businesses on handling administrative procedures; and reduce regulations by at least 20 per cent.

The State Bank of Vietnam (SBV) has released a draft regulation on the debt trading and purchase activities of credit institutions and foreign bank branches. The new regulations ensure transparent and substantive debt purchases and prevent abuse of debt trading and purchase to hide bad debts.

The Vietnam Asset Management Company Limited (VAMC) will open a debt trading floor on October 15. The floor will provide a new, professional, and effective service for bad debt settlement, in order to fully handle bad debts and promote the development of a debt trading market. The first session of the floor is expected to see at least VND3 trillion ($132 million) worth of bad debts traded.

According to Mr. Michael Kokalari, VinaCapital’s Chief Economist, the conditions and business practices in the Chinese and Vietnamese real estate markets are not the same, so the chance that the Evergrande debt crisis in China will affect Vietnam is negligible.

With the difficulties facing businesses being primarily due to a lack of cash flow, it is necessary to introduce a rapid and large-scale interest rate stimulus package. It is also possible to use foreign currency reserves to revive businesses instead of issuing bonds, experts told the “Brave, creative and responsible enterprises against the pandemic” online forum held on October 11.

As of October 7, credit in the entire banking sector had increased only 7.42 per cent compared to the end of 2020. From January 23, 2020 to the end of September, the total amount of interest exemptions and reductions to support businesses was VND27 trillion ($1.2 billion).