Banks provide support for customers affected by Covid-19

09:35 | 18/03/2020 Finance - Banking

(VEN) - Commercial banks have cut lending interest rates and rolled out soft credit packages in a bid to help customers mitigate the adverse impacts of the Coronavirus disease (Covid-19).

banks provide support for customers affected by covid 19

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) is providing support for Covid-19 affected customers in the fields of transport and warehousing, tourism, restaurants, hotels, food and beverages, and import-export companies mainly operating with Chinese partners in the fields of agricultural production, seafood, garment and textile, leather and footwear. According to top Vietcombank officials, the bank will reschedule and extend the repayment period without charging overdue penalties, and reduce interest rates for its clients. Specifically, Vietcombank plans to reduce interest rates by one percent for existing short-term loans of Vietnamese dong and 1.5 percent for medium- and long-term loans. For existing US dollar borrowers, interest rates will be reduced by 0.5 percent for short-term loans and 0.75 percent for medium- and long-term loans. Interest rates will be reduced by up to one percent for new Vietnamese dong loans and 0.5 percent for new US dollar loans. Vietcombank General Director Pham Quang Dung said bank leaders have directed departments to deploy the preferential interest rate program soon in order to support Covid-19 affected customers.

The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) announced interest rate cuts for businesses hit by the epidemic. A maximum reduction of 1.5 percent per year is applied to unsecured loans and one percent per year for secured loans.

The Vietnam Export Import Commercial Joint Stock Bank (Eximbank) earmarked VND4 trillion to lend to small- and medium-sized enterprises (SMEs) with concessionary interest rates from 6.99 percent per annum. Kienlongbank lowered lending rates by up to three percent annually for existing customers who wish to take out fruit cultivation loans for dragon fruit, watermelon, durian, jackfruit, mango, rambutan and bananas.

At a meeting to map out appropriate credit measures to support businesses and residents directly affected by the Covid-19 epidemic, State Bank of Vietnam (SBV) Deputy Governor Dao Minh Tu said the epidemic could badly affect manufacturing and business operations in the country, especially tourism, logistics, import-export and agricultural production, as well as lending and repayment of debts. Therefore, commercial banks and other units in the banking sector should monitor business performance and the extent of damage experienced by borrowers due to the epidemic, so they can promptly adopt support measures, including rescheduling repayments and lowering interest rates.

Commercial banks must not raise interest rates, including deposit rates as their liquidity is adequate and the central bank will make adjustments to help banks lower interest rates and support businesses and people in emergencies, Dao Minh Tu said.

In addition to the implementation of solutions to support Covid-19 affected customers, the SBV asked credit institutions to promote credit expansion, especially for priority sectors of agriculture businesses, firms producing goods for export, small- and medium-sized enterprises, enterprises operating in support industries, as well as hi-tech enterprises, including startups.

SBV Deputy Governor Dao Minh Tu asked the SBV’s Monetary Policy Department and Department of Credit for Economic Sectors to direct commercial banks to reschedule debts in order to support businesses and people and complete a draft mechanism to support bank loans to those affected by the Covid-19 epidemic.

Duy Minh