This is the latest information announced by the State Bank’s Permanent Deputy Governor Dao Minh Tu on the afternoon of September 20 at the Conference on implementing solutions to support businesses and people affected by storm No. 3.

According to the Deputy Governor, localities with large outstanding debts include: Yen Bai accounts for 18.55% of total outstanding debts in the area, Hai Phong accounts for 10.65%, Quang Ninh accounts for 7%, Hai Duong accounts for 8.64%…

“The scale of damage caused by storm No. 3 this time is much larger and more serious than previous natural disasters, so the support policy and responsibility of banks to accompany borrowers must also be much greater,” the Deputy Governor emphasized.

Up to 50% off loan interest

At the conference, 17 banks announced support programs for individual and corporate customers affected by storm No. 3. In addition to debt restructuring and deferral policies, most banks have reduced lending interest rates on existing and new loans, generally by 1-2%. Notably, some banks have reduced current interest rates by up to 50% for customers borrowing capital affected by storms and floods.

Accordingly, a representative of Tien Phong Commercial Joint Stock Bank (TPBank) said that it has allocated more than VND 2,000 billion to support individual customers with a reduction of up to 50% of current interest rates, and this preferential interest rate will be kept fixed until January 31, 2025 at the latest. Similar to corporate customers, TPBank also allocated VND 2,000 billion; of which VND 1,200 billion supports interest rates for existing customers and VND 800 billion for new borrowers with a maximum interest rate reduction of up to 2%.

According to Mr. Ho Nam Tien, Loc Phat Commercial Joint Stock Bank (LPBank), after reviewing, there is about 29,000 billion VND of outstanding loans of the bank with 63,200 customers affected by storm No. 3 and floods after the storm, especially individual customers and small businesses in mountainous areas. LPBank reduces interest rates by up to 2%/year for existing customers, applied from now until the end of 2024 with a corresponding reduction of about 85 billion VND. At the same time, build a new loan package of 8,000 billion VND, with loan interest rates from 6 – 6.5%/year.

At the Military Commercial Joint Stock Bank (MB), depending on the level of damage, financial capacity… of the customer, MB reduces interest rates by up to 2% for existing customers; in which, for long-term loans, the reduction is from 1 – 2%/year, short-term loans are reduced from 0.5 – 1%/year, applied from today (September 20) until the end of 2024. In addition, MB also added 7,000 billion VND to the new loan package for individual customers, increasing the package size to 9,000 billion VND, with interest rates reduced by 1% compared to the normal interest rate.

A representative of the Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) estimated that there were nearly VND2,000 billion in outstanding loans and 500 customers who suffered losses after the storm. HDBank has proactively worked directly with customers from its headquarters to its units in 26 northern provinces to extend and postpone debt. In addition to debt restructuring, HDBank has also implemented a VND10,000 billion package to support interest rate reduction, including: VND3,000 billion in interest rate reduction for existing customers and VND7,000 billion in new loans, focusing on small and medium-sized enterprises (SMEs) and individual customers.

Previously, leaders of four state-owned commercial banks also said they had reduced interest rates by 0.5 – 2% for customers.

Mr. Le Quang Vinh, Deputy General Director in charge of the Executive Board of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) emphasized that Vietcombank proactively reduced interest rates by up to 2% for all customers who suffered heavy losses due to storm No. 3 without having to wait for customers to submit a request. The total outstanding loan support is about 160,000 billion VND.

“Based on the reassessment of the damage, Vietcombank has added criteria on regions, industries… to have separate support policies. Some customers in the agriculture, forestry and fishery sectors have suffered very heavy damage, Vietcombank will work separately with customers to provide specific support in addition to reducing interest rates,” Mr. Vinh shared.

Similarly, the Bank for Agriculture and Rural Development (Agribank) has also proactively reduced interest rates for 100% of affected customers, without collecting late payment interest. Mr. Pham Toan Vuong, General Director of Agribank, estimated that the existing outstanding loans with reduced interest rates would be about VND 40,000 billion, while the interest rates for newly arising outstanding loans would also be reduced by 0.5 – 2%, applicable until December 31, 2024.

At Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), preliminary statistics show that about VND40,000 billion in outstanding loans to corporate customers and VND20,000 billion in loans to individual customers were damaged by the storm. VietinBank has set aside a 1% interest rate support package, worth VND100,000 billion, to support both old and new customers immediately, applicable until the end of 2024.

Similarly, the Bank for Investment and Development of Vietnam (BIDV) estimates that more than 1,000 customers have been affected by the storm with outstanding loans of more than VND40,000 billion. BIDV has reduced interest rates by 0.5 – 2% depending on the level of damage to customers. In addition, the bank has also launched a VND60,000 billion credit package for new customers with preferential interest rates.

Not only domestic banks, Shinhan Bank Vietnam also restructured debt, waived interest rates and continued to lend to customers affected by the storm. Interest rates were reduced by a maximum of 1% for corporate customers and up to 1.5% for individual customers borrowing capital affected by the storm.

Proactive resources, synchronous implementation

Appreciating the banks’ proactive announcement of support policies to customers and on the media, Deputy Governor Dao Minh Tu commented that most banks have shown a sense of responsibility and proactively built support packages.

“The packages offered are very positive, most of them reduce by 1-2%, some banks reduce up to 50% of current interest depending on the level of damage, proactively reducing without waiting for customers to request such as Vietcombank, Agribank…, small-scale banks also have very positive policies, the support period lasts until the end of the year, some units even until the beginning of next year”, the Deputy Governor assessed.

Mr. Dao Minh Tu expressed his opinion that the banking industry must actively share with the resources of commercial banks, specifically sharing profits, through reducing interest rates, saving all management and operating costs, depending on the capacity of banks so that the level of support is commensurate with the scale.

At the same time, it is necessary to provide timely, synchronous, and targeted support, proactively handle the situation, not let customers have to make requests, properly implement commitments, publicly and transparently implement policies, and not take advantage of policies…

Previously, Mr. Cao Tuong Huy, Chairman of the People’s Committee of Quang Ninh province, proposed that there should be a policy of debt suspension and extension for households growing forests and aquaculture products that lost everything after the storm with specific procedures and instructions. As for new borrowers who currently have no collateral, banks need to provide specific procedures and lending options.

“We request that banks continue to have synchronous solutions and preferential policies for customers borrowing capital. Local authorities commit to support and create the most favorable conditions for people,” Mr. Huy suggested.

In addition to the proposal on debt restructuring, debt forgiveness and new loans for people and businesses affected by the storm, Mr. Nguyen Dang Binh, Chairman of the People’s Committee of Bac Kan province, also proposed that the banking sector create conditions to arrange social security capital sources to help the locality recover after the storm.

Concluding the conference, Deputy Governor Dao Minh Tu said that the State Bank will continue to operate a flexible monetary policy, control inflation, stabilize exchange rates, create macroeconomic stability, contribute to ensuring economic growth targets, create capital sources to support and overcome damage caused by storms and floods…

At the same time, research and soon submit to the Government a mechanism for risk provisioning, as a basis for developing a separate policy for debt deferral and deferral for those affected by storm No. 3. This is both to support businesses and to help commercial banks have a suitable legal corridor, ensuring safe banking operations and risk management.

In addition, the State Bank is also developing an action program for the banking sector; including the Governor’s directive on implementing flood support.

For credit institutions, the Deputy Governor directed to continue to evaluate to have statistical reports, verify as soon as possible the losses of customers, avoid distorting the issue, taking advantage of policies. There should be written instructions and guidance for branches to immediately implement the announced incentive packages, how to make all commitments and announcements come into life…

At the same time, strengthen communication of widespread support solutions, urgent and flexible new loans, so that people can access policies, while still ensuring capital safety; advise and consult localities and customers on plans to restore production and business activities.

“The State Bank encourages banks to promote consumer lending, especially to people who have lost everything after the storm, to help stabilize their lives. At the same time, it requires banks to promptly report difficulties in implementation to gain consensus and direction,” the Deputy Governor emphasized.