Commercial banking system to share difficulties with residents and businesses

Following the direction of the Government and State Bank of Vietnam on urgent solutions to remove difficulties for production and business, assuring social security to cope with the pandemic, commercial banks in the province continue to actively implement many solutions, share difficulties with customers.

All customers affected by the Covid-19 are supported by commercial banks in many forms. In photo: Customers make transactions at BIDV Binh Duong branch.

To support customers

The widespread pandemic has negatively affected the socio-economic conditions. The commercial banking system in Binh Duong has taken many practical actions and solutions to share difficulties with people and businesses. Commercial banks continued to review and simplify their process and procedures to handle applications for loan payment rescheduling, loan repayment, loan interest exemption and reduction, fee and charge exemption and reduction for customers.

For example, VPbank has a policy for export companies of agricultural and aquatic products to reduce 1.5%/year of lending interest rate for unsecured loans and 1%/year for secured loans. Vietinbank also implemented a package to support businesses during the Covid-19. This solution aims at three main goals: to financially support businesses by reducing 1%/year of lending interest rate, and offering free or discounted transaction fees of up to 20 types. From beginning of the second quarter of 2021, Vietinbank has reduced 1%/year of lending interest rate to existing loans and new disbursements of customers.

In addition, other commercial banks have also set up debt restructuring plans to support customers, lowered loan interest rates for affected customer groups. Tran Ngoc Linh, Director of BIDV Binh Duong branch said, in addition to policies that have been implemented from 2020, from 15 July to 31 Dec 2021, BIDV continued to reduce 1%/year of interest rates to outstanding loans and up to 2%/year to some customer groups directly affected by the pandemic, customers who are enterprises producing essential goods for the economy, enterprises with a large workforce. In addition, customers suffering a decline in business activities are entitled to a reduction in loan interest rates.

Similarly, Nguyen Thai Minh Quang, Director of Vietcombank Binh Duong, said that over the first six months of 2021, Vietcombank Binh Duong has offered two support packages to reduce interest rates for corporate customers and residents affected by the pandemic, with a total outstanding loan entitled to preferential interest rates of 10,962 billion VND, the total preferential interest rate of 103 billion VND... In general, from 2020 to now, Vietcombank has continuously implemented seven interest rate reductions to support businesses and people affected by the Covid-19 and natural disasters. Currently, Vietcombank is applying a policy of reducing loan interest rates for the third period in 2021 to all customers from 15 July to 31 Dec 2021. In addition to interest rate cuts, Vietcombank has also reduced fees, restructured debts and kept intact debt groups. In addition, Vietcombank donated nearly 200 billion VND to localities and health branch for disease prevention and control.

In addition, from beginning of the current Covid wave, commercial banks in the province has supported the disease prevention and control in the province, namely, donating ambulances, medical equipment, necessities, funds to join hands with the province realize the "dual goal" of both curbing the pandemic and supporting economic growth.

To accept profit decline

According to Vo Dinh Phong, Director of State Bank of Vietnam - Binh Duong branch, since the pandemic happened, credit institutions in the province have effectively supported customers affected by the disease. By the end of June 2021, there were 69 credit institutions that restructured the repayment term and kept debt groups unchanged for 1,085 customers with a total loan balance of VND 6,011 billion; interest exemption and reduction for 4,865 customers, with total outstanding loan value of VND 7,389 billion. Total new loan to help customers overcome difficulties from 23 Jan 2021 to the end of Jun 2021 was VND 147,750 billion with 11,930 customers.

Leaders of commercial banks said that by the end of 2020, business plans expected high growth rates. However, the outbreak of the coronavirus caused banks to change their operating plans, especially the plan for safe growth and more modest profits in 2021. Nguyen Thai Minh Quang said that as of June 30, the bank's deposits increased by 3.2% compared to beginning of the year, outstanding loans increased by 3.1%. Over the first six months of the year, Vietcombank Binh Duong offered total preferential loan interest rate of about VND 100 billion, actively reduced interest rates to support businesses and residents affected. Therefore, Vietcombank's profit is estimated to decrease about 10% compared to their 2021 target.

Similarly, Tran Ngoc Linh, said that BIDV Binh Duong simultaneously implemented many solutions to support businesses, hence over the first six months, provincial BIDV system applied credit packages of preferential interest rates valued up to 368,000 billion VND and actively reduced profits to support customers.

Reported by Thanh Hong - Translated by Ngoc Huynh

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