Leaders of many commercial banks said that thousands of customers affected by Covid-19 epidemic were waiting for banks to restructure debts.
Vietjet is one of the first enterprises to submit an application to the State Bank of Vietnam (SBV), requesting to carry out a policy to extend the time for debt payment and reduce the interest rates. In the context that the Covid-19 epidemic has a serious impact on the aviation industry, Ho Ngoc Yen Phuong, Vietjet’s deputy general director, hopes that the support from banks will contribute to reduce difficulties for businesses.
Of course, Vietjet is not the only case. So far, SBV has received dozens of applications from businesses and business associations to propose rescheduling, restructuring debt repayment, and reducing interest rate.
On the positive side, last week, SBV issued Circular 01/2020/ TT-NHNN regulating the restructuring of loan repayment, exemption and reduction rates, to support businesses and people affected by the epidemic, removing the critical difficulties of the current business.
Do Minh Phu, Chair of Board of directors of Tien Phong Commercial Joint Stock Bank (TPBank), said: “According to our statistics, from the beginning of the Covid-19 epidemic (January 27) up to now, about 1,000 TPBank customers with outstanding loans of approximately 10 trillion dong are likely unable to pay their debts on time”. Before Circular 01/2020/ TT-NHNN was issued, TPBank announced that it would consider extending, restructuring the debts, not applying penalty interest and deploying preferential loan packages up to three trillion dong with interest rates down 1 1.5 percent to support businesses.
According to SBV, up to now, there has been about 926 trillion dong of outstanding loans of customers unable to pay on time, accounting for more than 11 percent of the total outstanding loans of the whole system.
Nghiem Xuan Thanh, Chair of Board of directors of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), said that this guiding circular was an important legal corridor for the bank to restructure the repayment term without transferring the debt group (without increasing the bad debt), while creating conditions for banks to continue making new loans for projects with efficient production and business plans in the near future.
“The level of reducing interest rates to support customers depends on the financial capacity of each business. At Vietcombank, the interest rate reduction is 1-1.5 percent per year for VND loans and 0.5 percent per year for foreign currency loans,” Thanh said.
Banks are fully entitled to proactively support customers
Up to now, banks have committed to support 285 billion dong for businesses in the form of debt rescheduling, debt restructuring, interest rate reduction, and fee reduction. Regarding implementation, by the end of the week, the banks have exempted or reduced interest for 80 customers with the total amount of about 350 billion dong; are considering exemption and reduction of interest for customers with the amount of 185 trillion dong; continue to complete new documents for customers with a loan of 24 trillion dong; consider exemption, reduction of interest and new loans to many businesses.
“The 250 trillion dong package may not be enough so commercial banks will contribute more. The banking sector, including TPBank, is always ready to accompany businesses. We have proactively calculated to reduce our profits to compensate for the business,” committed TPBank’s Chair.
The issue many businesses are interested in is the eligibility for the banks to restructure loan repayment term and reduce interest rates.
Under the provisions of Circular 01/2020/ TT-NHNN, to be supported by banks, enterprises must meet three conditions.
Firstly, arising from lending and financial leasing activities.
Secondly, there is an obligation to repay the principal and/or interest within the period from January 23, 2020 to the next day after three months from the date the prime minister announces the end of the Covid-19 epidemic.
Last but not least, customers are not able to repay their principal and/or interest on time due to a decrease in revenue and income due to Covid-19.
However, the level of support, how to apply for each business, will be under the initiative of each bank.
Vo Hoang Tan Van, general director of Sai Gon Joint Stock Commercial Bank (SCB) said that it was appropriate to give banks the right to proactively restructure debts, because they would balance according to their financial situation and the situation of each customer to make appropriate decisions. “The banks lend to customers so they should be given the right to restructure debts and reduce the interest rates. In fact, the banks are willing to fully support their customers,” Van stated.
Meanwhile, a leader of a joint stock commercial bank said that in the recent time, under pressure from SBV, the health of the banking system had improved and its resilience was at the best level ever. Therefore, banks have enough power to deal with the Covid-19 epidemic and participate in supporting businesses. However, this leader said that not all businesses were supported. Specifically, with businesses still having the strength to cope with the epidemic, the banks would not extend the debts, to focus on supporting businesses that were really difficult. In addition to the support of the banks, businesses themselves must also manage and come up with business initiatives to overcome the pandemic.
