A week after the State Bank of Vietnam issued Circular 14 on debt rescheduling to alleviate the difficulties faced by businesses due to the COVID-19 pandemic, many individual and corporate borrowers said they are still waiting to hear from banks.

The director of a tourism and transport company in HCM City said his company has borrowed from three banks to buy cars.

Twenty cars were "in the parking lot" when the city mandated social distancing, and so generated no revenues, but every month his company received notices from the banks for payment of principal and interest, he said.

"I have contacted all three banks to ask for rolling over the loans until the end of this year, but have not received a response. If the debt is extended until the end of the year, my company might repay the debt because of the great opportunity for the recovery of the tourism industry.”

Pham Van Viet, general director of Viet Thang Jeans Co and vice chairman of the HCM City Garment-Textile, Embroidery and Knitting Association, told Nguoi Lao Dong (Labourers) newspaper that many export firms could sustain cash flows only for a short time more but face great pressure to pay loans.

Recently banks reduced interest rates as mandated by Circulars 01 and 03, but only by around 1 percentage point, and businesses expect banks to provide more support when Circular 14 comes into effect, he said.

"Besides debt restructuring, businesses also want fresh credit to buy raw materials to prepare for their recovery. It is very difficult to get new loans … because most of their assets have been mortgaged and have nothing more left.

Phan Dinh Tue, Sacombank’s deputy CEO, said Circular 14 is more open than the other two circulars for providing support to individual and corporate customers.

Customers’ debts payable between January 2020 and August 2021 have been deferred until June 2022, and this would help ease financial pressure and enable a recovery.

"As soon as Circular 14 took effect, Sacombank continued to restructure the debts of individual and corporate customers. As for reducing interest rates as prescribed by the new circular, the bank considers each case based on the epidemic’s impact by sector.”

Nguyen Dinh Tung, general director of the Orient Commercial Joint Stock Bank (OCB), said not all customers having outstanding loans at banks are supported. As for reducing interest rates, his bank could only shave off 1-2 percentage points and not 3-4 percentage points as many customers expect, he said.

"At OCB, customers in priority areas or in production - trading who have suffered heavy losses due to COVID-19 will have their loan interest reduced. Some retailers and workers losing jobs will even get an interest waiver for one to two months.”

According to bank managements, not only businesses but also banks have been hit hard by the pandemic as many customers fail to repay their debts.

The head of a commercial bank said: “We do not know when businesses will resume production and trading activities. The bank does not have much reserves. It is very difficult to ask commercial banks to sharply reduce loan interest rates at this time.” — VNS