The Governor of the State Bank of Vietnam (SBV) has issued Directive No. 01/CT-NHNN on implementing key tasks of the banking industry in 2024, including the promotion of bad debt handling and recovery.

Under the recent directive, Governor Nguyễn Thị Hồng requires SBV’s agencies and credit institutions to drastically and effectively implement the project on restructuring the system of credit institutions associated with handling bad debts in the 2021-25 period to develop the system of credit institutions healthily, effectively and transparently in accordance with Việt Nam’s laws and international standards.

Focus will be directed on effectively implementing plans to handle weak credit institutions and restructure specially controlled commercial banks under the direction of competent authorities.

Credit institutions are also required to promote handling and recovery of bad debts; improving credit quality to prevent and minimise newly arising bad debts; focusing on inspection and supervision of potential risk areas to prevent, detect and handle risks and violations of credit institutions, which contribute to ensuring security of the monetary and banking markets.

The directive also requires the SBV’s agencies and credit institutions and foreign bank branches to seriously implement solutions to manage the monetary policy and banking operations in 2024 to control inflation, ensure macro-economic stability and support economic growth.

According to the SBV, in 2024 the overall goal and task of the banking industry is to operate monetary policy proactively, flexibly, promptly and effectively. The monetary policy will be closely coordinated with the fiscal policy and other macro-economic policies to support economic growth, stabilise the macro-economy and control inflation at about 4-4.5 per cent in 2024.

The SBV will manage credit growth rate for the entire system of credit institutions at about 15 per cent in 2024. However, the rate can be adjusted to ensure appropriate developments and actual situations. — VNS