Being questioned about banks “hiding” bad debts, what did Governor Nguyen Thi Hong say?

Questioning Governor Nguyen Thi Hong on the afternoon of June 8, delegates Luu Van Duc and Doan Dak Lak expressed concern about the problem of increasing bad debt due to the impact of the Covid-19 pandemic. Delegates asked the Governor to share solutions of the banking industry to control bad debts.

Similarly, delegate Vuong Thi Huong, Ha Giang province’s National Assembly delegation also raised the question, even when Resolution 42 is still valid, dealing with bad debts is sometimes still difficult, especially in the face of negative impacts. of the Covid-19 epidemic.

The delegate asked the Governor to clarify the advisory responsibility of the State Bank on comprehensive and long-term solutions to speed up the bad debt settlement process?

Delegates also said that there are opinions that there is a situation where credit institutions have not reported all of their bad debts and do not publicize the real number due to concerns about losing the credit institution’s brand. As a manager of the industry, the delegate asked the Governor to say whether or not the above situation is present and if there is inspection, supervision and solutions in the coming time?

Responding to questions from delegates, Governor Nguyen Thi Hong said, In the spirit of Resolution 42, with the attention of the National Assembly, bad debt should be brought below 3% in 2020 but in 2020, 2021, the economy will be affected by the Covid-19 pandemic. As a result, the bad debt of the banking system increased.

Faced with the difficulties of businesses and people, if bad debts are allowed to increase, it will be difficult for businesses and people to access new loans. Therefore, right in March 2020, the State Bank of Vietnam issued a circular allowing businesses and people to restructure the repayment term and keep the debt group unchanged.

Right from the issuance of the Circular, the State Bank has taken the initiative in the provisions of the Circular. That is, it is required that credit institutions provide a roadmap for setting up risk provisions for debts that are structured to keep the same debt group, so that when bad debts arise, the credit institutions also have financial resources to handle them. .

In the current operating instructions, the State Bank also regularly directs credit institutions in such conditions, but lending must be strictly guaranteed and not downgraded. Because, in fact, we’ve seen crises caused by subprime lending. The fact that when lending must be strictly controlled, it has an impact to limit new bad debts arising.

In addition, regarding the implementation of Resolution 42/2017/QH14, Governor Nguyen Thi Hong affirmed that this Resolution is very effective in dealing with bad debts. difficulties, making it difficult for businesses to access credit capital from banks.

If Resolution 42 is revised, it will take a long time to assess the impact of these policy amendments, so the State Bank proposed to the National Assembly to extend the entire period, during the time when the Resolution is due, the State Bank of Vietnam (SBV) will coordinate with ministries and branches to review the provisions of the law, advise on how to handle bad debts.

Responding to delegate Vuong Thi Huong about credit institutions reporting bad debts incorrectly, hiding bad debts, the Governor said, for credit institutions reporting bad debts incorrectly, through inspection, If found, they will be severely punished. Also according to the Governor’s share, the banking industry has implemented a credit information system.

“This is a good tool for credit institutions to check customers to see how they have debts at other banks, thereby assessing bad debts,” the Governor said.