Prime Minister Phạm Minh Chính attends the conference to implement 2024 tasks of the banking system on Monday. — VNA/VNS Photo Dương Giang

Prime Minister Phạm Minh Chính asks the banking system to ensure adequate capital for the economy in the context that difficulties and challenges remain.

“Don’t let any congestion happen. Don’t let people and business lack capital when they need support from the banking system,” Chính said while attending the conference to implement 2024 tasks of the banking system held by the State Bank of Việt Nam (SBV) on Monday in Hà Nội.

As the domestic economy is forecast to continue facing numerous difficulties and challenges together with complicated global economic developments, Chính asks SBV to keep a close watch, and raise monetary policies promptly, proactively and flexibly.

Credit management must be flexible and in line with macro-economic developments and inflation to ensure the capital demands of the economy are met with the credit growth target of 15 per cent in 2023.

Stressing that the banking sector is the lifeblood of the economy, Chính applauded the contribution of the banking system in the country’s socio-economic achievements in 2023.

SBV has made significant contributions to maintaining macroeconomic stability, controlling inflation, ensuring major balances and stabilising the foreign exchange market and exchange rates amidst complex and unpredictable global development, in particular, high inflationary pressure and currency appreciation in key currencies.

Policy interest rates were cut four times last year to aid the economy with credit growth at 13.71 per cent compared to 2022.

The SBV continues to be a pioneer in digital transformation, administrative reform and promoting non-cash payments, contributing to optimising costs for the economy and improving the business environment.

Significantly, the deposits totalled over VNĐ13.5 quadrillion, the highest level ever, indicating trust in the banking system and providing a vast resource for the country’s development, he said.

Chính also welcomed the SBV’s new mechanism for credit operation in 2024, including granting limits right for the beginning of the year.

Still, there are limitations, he said, urging the banking system to make further efforts to provide more timely and appropriate responses with more attention to risk control, enhancing coordination with relevant ministries and agencies to tackle difficulties for businesses.

As 2024 is an important year for achieving targets set in the 5-year socio-economic development plan, Chính asked the SBV and the entire banking system to unite and join forces with other ministries and agencies to fulfil the goals set for this year.

The banking industry must not let the Government be passive or surprised about monetary policy. “The banking system must ensure smooth circulation of money and prevent capital shortage to promote inclusive and sustainable development,” Chính emphasised.

He urged banks to closely monitor global development to have timely policy responses to control inflation at about 4-4.5 per cent and ensure major balances of the economy, stabilise the currency market, foreign exchange and operational safety of credit institutions.

Drastic efforts must be taken to effectively deploy credit solutions to remove difficulties and promote production and business with the credit flow to be directed into prioritised sectors and strictly controlled in areas with potential risks.

“It is necessary to stop providing lending focused on some large enterprises and customers,” he said.

In addition, more drastic solutions must be raised to continue lower lending rates, including cutting unnecessary fees, reducing operation costs, simplifying procedures and increasing the application of information technology and speeding up digital transformation.

The restructuring of credit institutions and resolving of bad debts must be sped up, coupled with the acceleration of the digital transformation process.

Inspection must be enhanced to prevent violations and ensure discipline in the monetary market and the banking system, he said. — VNS