At a branch of the Vietnam Bank for Agriculture and Rural Development (Photo: VNA) Hanoi (VNS/VNA) - The State Bank of Vietnam is drafting amendments to acircular that restructures repayment periods, waives and reduces interestrates and fees and maintains debt classification to support peopleaffected by the COVID-19 pandemic to ensure more receive the support.
According to the draft circular which was recently made public for comments,more loans could have repayments postponed until after the end of thisyear.
Restructuring of the repayment periods and maintaining debt classificationwould be provided to loans which required repayments to be made from January 31to December 31, instead of from January 31 to three months after the PrimeMinister announces the pandemic is over.
The draft circular also allows credit institutions and foreign banks’ branchesto restructure repayment periods and maintain debt classification for loansdisbursed from January 23 to April 24. Under Circular 01, restructuring of therepayment periods and maintaining debt classification were only provided toloans disbursed before January 23.
According to Can Van Luc, chief economist of the Bank for Investment andDevelopment of Vietnam (BIDV), expanding loans subject to the circular’ssupports was essential to ease the financial burden for companies affected bythe coronavirus.
Financial and banking expert Nguyen Tri Hieu expressed concerns overmaintaining debt classification.
Hieu said problems would arise if enterprises went insolvent but their debtclassification stayed the same, which would not fully reflect the risks as someloans were becoming non-performing.
He said it was necessary to raise details for classifying restructured debtswhich were not repaid following the restructured payment periods, which wouldhelp prevent risks for the financial market and improve the efficiency of thepolicy.
According to the State Bank of Vietnam, credit institutions restructuredpayment periods for nearly 260,000 customers with total outstanding loans ofnearly 180 trillion VND and reduced interest rates for 421,000 customerswith total outstanding loans of 1.3 quadrillion VND. Credit institutionsalso provided new loans worth 1.1 quadrillion VND to 240,000 customers withinterest rates 0.5-2.5 percentage points per year lower than the pre-pandemicperiod./.
According to the draft circular which was recently made public for comments,more loans could have repayments postponed until after the end of thisyear.
Restructuring of the repayment periods and maintaining debt classificationwould be provided to loans which required repayments to be made from January 31to December 31, instead of from January 31 to three months after the PrimeMinister announces the pandemic is over.
The draft circular also allows credit institutions and foreign banks’ branchesto restructure repayment periods and maintain debt classification for loansdisbursed from January 23 to April 24. Under Circular 01, restructuring of therepayment periods and maintaining debt classification were only provided toloans disbursed before January 23.
According to Can Van Luc, chief economist of the Bank for Investment andDevelopment of Vietnam (BIDV), expanding loans subject to the circular’ssupports was essential to ease the financial burden for companies affected bythe coronavirus.
Financial and banking expert Nguyen Tri Hieu expressed concerns overmaintaining debt classification.
Hieu said problems would arise if enterprises went insolvent but their debtclassification stayed the same, which would not fully reflect the risks as someloans were becoming non-performing.
He said it was necessary to raise details for classifying restructured debtswhich were not repaid following the restructured payment periods, which wouldhelp prevent risks for the financial market and improve the efficiency of thepolicy.
According to the State Bank of Vietnam, credit institutions restructuredpayment periods for nearly 260,000 customers with total outstanding loans ofnearly 180 trillion VND and reduced interest rates for 421,000 customerswith total outstanding loans of 1.3 quadrillion VND. Credit institutionsalso provided new loans worth 1.1 quadrillion VND to 240,000 customers withinterest rates 0.5-2.5 percentage points per year lower than the pre-pandemicperiod./.
VNA
