BANKS MUST REDUCE EXPENSES ON SALARIES AND BONUSES TO REDUCE INTEREST RATES
This is the content prescribed in the Directive 02/CT-NHNN dated March 31, 2020 on urgent solutions applied by the banking sector to enhance the prevention and control of Coronavirus disease (Covid-19) and overcome difficulties caused by the disease by the State Bank of Vietnam.
At the direction of the State Bank Governor, the units at the central bank shall provide refinancing for credit institutions for implementation of programs under the direction of the Government and Prime Minister, and support the restructuring of credit institutions and settlement of non-performing loans in the forms of refinancing on the basis of special bonds of the Vietnam Asset Management Company (VAMC).
Next, the central bank shall hold working meetings directly with chairpersons of Members’ Councils/Boards of Directors/Directors General of credit institutions for effectively implementing solutions to remove difficulties for clients affected by the disease, such as rescheduling loans, exempting or reducing interests on existing loans and retaining categories of bank loans under Circular No. 01/2020/TT-NHNN and provide new loans with preferential interest rates.
Noticeably, the State Bank Governor requires credit institutions to take the initiative in reviewing and reducing operating expenses, especially expenses on salaries and bonuses, and timely adjust business plans and financial plans to suit reality before shareholders ’meetings are held; in the immediate future, not to distribute dividends in cash so as to reserve resources for drastically reducing interest rates for existing outstanding loans and new loans.
This Directive takes effect on the signing date.
