Viet Nam Human Rights
First achievements in the economic restructuring
10/11/14
"The restructuring of the banking system has deployed aggressively,
complying with the roadmap and became the bright spot in the overall restructuring
of the economy. Thank to measures to restructure credit institutions with
flexible management of monetary policy, strengthen the management of the
currency market that credit system has been secured and the risk of disruption,
insecurity system has been pushed back.
As
directed by the Governor of the State Bank, all of the contact made by Congress
delegation, with people were the composition of the participating banks to
directly answer any questions, problems, requests of voters. “Keeping the
prices of Vietnam
currency, stable gold market has created a stable economy and specially created
psychologically reassuring to society”.
After two
proactive and aggressive years of implementation, synchronous solutions for the
restructuring of credit institutions so far have been got some positive
results. Firstly, we gradually restore order and discipline in the currency
markets, gold and forex markets gradually stabilized and under control of the
State Bank. Secondly, the risk of system is descending, system’s safety of
credit institutions and affordability of credit institutions improved,
structural shift is stable; funds and credit institutions less depend on market
funding.
The
credit institution has been renewed, system management, administration, control
systems, internal audit systems were enhanced. Economic management apparatus
was reviewed, the banking network was rearranged and business operations were restructured. That all gradually oriented
business strategies, improving competitiveness and enhancing information
technology as well as modernization of banking technology. Among them it
focused on credit restructuring by concentrating capital for the manufacturing
sector, supporting and alleviating difficulties in manufacturing, trading and
promoting economic development.
Especially
the source of investment capital for agriculture and rural restructuring step
towards improving capital ratio stable funding over the long term, reducing
dependence on capital, raising interbank market; gradually moving wide business
model towards reducing dependence on credit operations and increase revenues
from non-credit activities.
Referring
to the issue of bad debts, the State Bank and credit institutions have actively
implemented uniformly, more drastic measures to control bad debts increase. As a
result, bad debts have been dealt a step, businesses continue to receive loans
with reasonable interest rates, helping to reduce operating costs for borrowers
because they would not incur overdue interest and loans with lower interest
rates.
Although
the model of Asset Management Company (VAMC) has never in precedent but
initially proves the positive effects of resolving bad debts of the system of
credit institutions difficulties and support to customers, thereby confirming
the validity of the selection tools in dealing with bad debts.
for the
banking sector, the biggest success is that we reversed the risk of collapse of
the ailing banks. The solutions to restructure the banks, restructure bad debt
and deductions risk reserve fund, selling the debt to VAMC combined with
appropriate monetary policy, all contributed significantly to the process of
economic recovery. “The problem of bad debt, bad debt trading is a business
sector can attract investors at home and abroad if there is an appropriate
mechanism. The Government should develop mechanisms and policies for markets
debt trading in accordance with international practices to attract significant
resources from society”.
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All comments [ 10 ]
Credit institution restructuring has recorded the most significant progress.
The first achievement is the establishment of a legal framework. The plan to restructure credit institutions during 2011-2015 was approved by the Prime Minister in March 2012 with Decision 254/QD-TTg, while the overall economic restructuring plan was not approved until February 2013.
We promulgated the Law on Deposit Insurance, amended the Ordinance on Foreign Exchange Control and issued the Decree on Gold Trading Management. With these legal documents, the worst scenarios have been considered.
The Law on Deposit Insurance affirmed that even when credit institutions go bankrupt, the depositors’ interest will be ensured by deposit insurance agencies.
Thanks to these measures, stability was re-established in the currency and gold markets, creating a favourable condition for the credit institution restructuring drive.
Risks were reduced and credit institutions’ safety and liquidity were improved.
So far, the most notable success of credit institution restructuring is preventing credit institutions from collapsing, ensuring the country’s monetary security.
In terms of legal documents, we have issued many decrees on enhancing SOE administration, streamlining management of State capital in SOEs and financial management in companies wholly owned by the State.
From January 1, 2015, the ASEAN Community will be formed and from January 1, 2018, the WTO’s grace period for Vietnam will end, creating much pressure on the Vietnamese economy.
For credit institutions, we must allow weak banks to go bankrupt and dissolve. Otherwise, bank owners will not be responsible for what they do.
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