Directive 06/2008/CT-NHNN business and production, goods circulation, prevention from economic recession

DIRECTIVE

ON THE IMPLEMENTATION OF MEASURES FOR MAKING CONTRIBUTION TO THE PROMOTION OF BUSINESS AND PRODUCTION, GOODS CIRCULATION, PREVENTION FROM ECONOMIC RECESSION, MAINTENANCE OF ECONOMIC GROWTH, SOCIAL SECURITY

Regarding the implementation of socio economic development tasks of 2009, our economy is favoured for maintaining economic growth, however, it shall encounter difficulties due to adverse effects from the world financial crisis and economic recession. With a view to implementing the Resolution No. 30/2008/NQ-CP dated 11 December 2008 of the Government on urgent solutions for preventing from economic recession, guaranteeing a social security and the Directive No. 35/2008/CT-TTg dated 9 December 2008 of Prime Minister on intensifying the implementation of solutions for promoting business and production, goods circulation, market stability and serving the coming Lunar New Year 2009, it is required by the Governor of the State Bank that credit institutions shall:

1. Continue to closely follow up the evolutions and forecast the impacts of the world financial crisis and economic recession on the local economy, monetary market and banking activity so as to take initiative in implementing measures of preventing from possible risks in accordance with the Directive No. 05/2008/CT-NHNN dated 9 October 2008 of the Governor of the State Bank on several measures of ensuring the secure, efficient business activity of credit institutions.

2. Implement, on a synchronous basis, measures of capital mobilization; adjusting the structure and term of mobilized capital resources in correspondence with the credit structure and term, ensuring security of business activity; timely satisfying the demands of deposit payment, especially on the occasion of the Lunar New Year 2009.

3. Expand credit on an effective basis, in accordance with provisions of applicable laws; apply appropriate lending interest in the condition that businesses, production households are facing difficulties in production, business; timely deal with difficulties in loans and credit approach of the customers, specifically as follows:

a. Evaluate credit situation of the year 2008 to perform suitable plans on scale, structure, rate of credit growth in 2009, in conformity with the capacity and structure of mobilized capital, in line with the orientations and targets of credit growth issued by the State Bank of Vietnam concerning credit growth in 2009; to control closely the credit quality.

b. Prepare and timely deploy specific credit programs immediately at the beginning of 2009, arrange capital and apply reasonable interest rate under the policy on giving priority to their customers in respect of agriculture and countryside, exports, small and medium enterprises, production of consumer goods, production of substitute goods of imports and use of local raw materials, creating more jobs for labourers. Lend for rice purchase and other credit programs in accordance with the direction of the Government and instruction of the State Bank of Vietnam; arrange sufficient capital for disbursing signed credit contracts in respect of national large, key projects, projects to be invested in line with the policy on promotion of investment of the Government.

c. Carry out the restructure of debt payment period in accordance with provisions of the Decision No. 783/2005/QD-NHNN dated 31 May 2005 of the Governor of the State Bank in respect of delinquent loans of farming households affected by natural disaster, enterprises facing difficulties in the consumption of products, goods and delinquent loans due to the impact of the world financial crisis causing the production, business facing difficulty, bad consumption and export of products; continue to consider and extend credit to demands which are effective and solvent; closely coordinate with Vietnam Development Bank to perform the guarantee acceptance, extension of credit to small and medium enterprises.

d. Exempt, reduce loan interests in compliance with provisions of the Regulation on lending by the credit institution to customers issued in conjunction with the Decision No. 1627/2001/QD-NHNN dated 31 December 2001 of the Governor of the State Bank.

e. Extend credit to enterprises which produce, reserve, deal in goods for the purpose of satisfying market demands before and during the Lunar New Year festival, particularly essential consumer goods, in order to prevent the happening of scarcity of goods, price fever.

f. Consider and reduce the lending interest rate of credit contracts in corresponding to the applicable lending interest rate; not punish the late payment of debt by small and medium enterprises which encounter difficulties in production, business, consumption of products, goods due to the impact of the world financial crisis.

g. State-owned commercial banks, of whom the decisive unit is Vietnam Bank for Agriculture and Rural Development, Peoples Credit Fund system shall boost the credit expansion to agricultural and rural area; other commercial banks shall reserve an appropriate capital proportion for credit expansion to agricultural and rural area.

4. Vietnam Bank for Social Policies shall take initiative in preparing plan on capital mobilization in accordance with applicable mechanism and submit it to the competent authority to supplement other capital resources in order to have more capital for lending to poor households, pupils, students and other beneficiaries of social welfare; check, regulate provisions on lending operation, procedures in order to facilitate the timely borrowing of beneficiaries of social welfare.

5. Strengthen the internal inspection and audit task, management of liquid capital, comply with provisions of the State Bank on adequacy ratio in business activity, provisioning and use of provisions against; check, amend and complete internal procedures on credit activity, monetary dealing, foreign exchange, payment, remittance, application of information technology in compliance with provisions of applicable laws; evaluate risks possibly occur in each operational process so as to immediately carry out measure of risk prevention, settlement.

6. Speed up the performance of projects on the modernization of banking technology in order to improve the business administration capacity, to centralize the payment at head office and the entire system connection; pay more attention to the improvement of banking services and utilities for customers.

7. To perform at the due course and ensure the accuracy of information, reports in accordance with provisions of the State Bank.

8. Implementing organization:

a. This Directive shall be effective after 15 days since its publication on the Official Gazette.

b. Director of Administrative Department, Director of Monetary Policy Department and Heads of units of State Bank, Managers of State Bank branches in provinces, cities under the central Governments management; Board of Directors and General Directors (Directors) of credit institutions shall be responsible for the implementation of this Directive.

c. The Office shall preside over, coordinate with concerned Departments in examining and speeding up, collect and report the implementation of this Directive to the Governor of the State Bank.