HANOI: Deputy Prime Minister Nguyen Van Thang has asked banks to cut lending interest rates by 1.5 percentage points to two percentage points for production, business and priority sectors to ease borrowing costs and support economic growth.
He made the request at a meeting on monetary policy management for the remainder of 2026 on Oct 16.
This was following directives from party general secretary and state president To Lam and the party central committee’s conclusion no 106 issued on Oct 15.
Nguyen acknowledged coordination between the State Bank of Vietnam (SBV) and the Finance Ministry in implementing monetary and fiscal policies, which had helped control inflation, maintain macroeconomic stability, safeguard the banking system and support growth.
However, he said a complicated and unpredictable global environment continued to put pressure on interest rates, the exchange rate and inflation.
Lending rates remained high, increasing capital costs for businesses and households and limiting their access to credit. Bad debts and risks in banking operations also remained a concern.
Nguyen called on the SBV to work with relevant agencies to introduce substantive measures to bring down lending rates.
Monetary policy should be managed proactively and flexibly, in close coordination with fiscal policy and other macroeconomic measures, while maintaining the goal of controlling inflation, safeguarding macroeconomic stability and ensuring major economic balances, he said.
The government aims to promote double-digit economic growth while maintaining financial system safety, he stressed.
The SBV was asked to review and draw lessons from measures taken to stabilise interest rates and lower borrowing costs, and to implement more effective and timely solutions.
Inspections and supervision must also be enhanced to ensure lenders’ compliance with interest-rate regulations and central bank directives, he said.
Credit institutions that fail to comply with instructions to stabilise rates and reduce lending costs, or engage in unhealthy interest rate competition, must be strictly dealt with. He also instructed the SBV to direct lenders to expand credit safely and efficiently, prioritising production, business activities and other priority sectors.
The SBV should also provide refinancing at reasonable interest rates to banks participating in social housing lending programmes, while maintaining strict controls over bad debts and safeguarding the banking system.
On asset quality, Nguyen called for effective and timely measures to resolve bad debts, prevent new ones and tighten credit risk management. This is particularly in sectors with elevated risks, including real estate.
He also urged continued restructuring of credit institutions alongside bad-debt resolution to improve the banking system’s soundness, efficiency, transparency and compliance with the law.
The government also called for decisive action against informal ownership arrangements, cross-ownership, hidden ownership and practices through which related entities or individuals manipulate or dominate credit institutions.
Violations must be strictly handled to prevent risks from accumulating or spreading across the banking system.
Commercial banks should continue to cut operating costs, accelerate digital transformation and improve efficiency to create room for lending rate reductions that benefit businesses. — Viet Nam News/ANN
