It is necessary to clearly define which cases are eligible for special 0% interest loans to avoid profiteering.

State Bank of Vietnam offers special loans with 0% interest rate per year to protect depositors

The draft Law on Credit Institutions (amended) being discussed at the National Assembly has the content of adjusting the authority of the State Bank to decide on special loans in the direction of "The State Bank decides on special loans with or without collateral for credit institutions. The collateral of special loans from the State Bank is according to the regulations of the Governor of the State Bank. The special loan interest rate of the State Bank is 0%/year".

Discussing at the afternoon group on May 20, National Assembly member Pham Duc An - Chairman of the People's Committee of Quang Ninh province, former Chairman of the Board of Directors of Agribank - said that the ultimate goal of giving more authority to the State Bank in special lending is still to protect depositors, avoid instability and panic, and contribute to ensuring system safety.

According to Mr. An, if a credit institution falls into a situation where it needs a special loan from the State Bank, lending at an interest rate of 0%/year will help that credit institution stabilize quickly and return to normal operations.

Therefore, the draft has been revised in the direction of assigning the State Bank to decide on special loans without collateral, applying an interest rate of 0%/year.

National Assembly Deputy Pham Duc An. Photo: QH

According to delegate Hoang Van Cuong ( Hanoi ), transferring the authority to lend at special interest rates from the Prime Minister to the State Bank is consistent with the spirit of decentralization and delegation of power.

However, to avoid taking advantage of the policy in cases where the interest rate is not 0%/year, Mr. Cuong suggested adding criteria and conditions for borrowing. Along with that, it is necessary to clearly define the responsibility of the State Bank in controlling cash flow to avoid risks.

"The State Bank is given more decision-making power, but its responsibilities must also increase," said Mr. Cuong.

Mr. Cuong proposed adding a ceiling for special interest rate loans of 0%/year, responsibilities of parties in ensuring the safety of the credit system, and rights of depositors.

Delegate Hoang Van Cuong, Photo: QH

Agreeing with the above opinion, delegate Thach Phuoc Binh (Tra Vinh) said that the decision to lend at 0% interest rate per year could be emotional if the bill does not clearly state the criteria and conditions for credit institutions to borrow.

Meanwhile, delegate Quan Minh Cuong (Cao Bang) noted the need to clarify whether the loan capital comes from the budget or from commercial banks. Mr. Cuong suggested using the state budget instead of using resources from commercial banks to avoid making things difficult for banks.

'The highest principle is to borrow and pay back'

Regarding the legalization of Resolution 42 of the National Assembly by adding 3 articles to Article 198 on the right to seize secured assets; Seize assets of judgment debtors being used as collateral for bad debts; Return of secured assets as evidence in criminal cases..., National Assembly Deputy Pham Duc An said that this is not a "favor" for credit institutions but for the benefit of depositors.

“We define credit institutions as financial intermediaries, borrowing to lend. And the loans here are mostly from people, so the loans need to be recovered to pay people and continue to circulate to other customers in need. Protecting the legitimate rights of credit institutions also means protecting the interests of depositors,” Mr. An stated his opinion.

“Moreover, borrowers and guarantors must be fully aware when using their assets as collateral, because the highest principle is that if you borrow, you must repay. When we have a clear view on this matter, if there is no source to repay the debt, we must accept the recovery of the collateral by the credit institution,” Mr. An added.

With the legalization of Resolution 42, people with secured assets will be aware of the obligation to hand over, avoid litigation procedures, and not waste time on enforcement.

From the perspective of someone who has worked in the banking sector for many years, Mr. Pham Duc An believes that when credit institutions recover bad debts, they will not have to set aside provisions, thus creating more conditions to reduce lending interest rates.

"Therefore, this is beneficial for the whole society," Mr. An affirmed.

Major General Nguyen Quoc Hung, Deputy Chairman of the National Assembly's Committee on National Defense, Security and Foreign Affairs, expressed concern that the scope and conditions of seizure by credit institutions, as well as the role of state agencies, have not been clearly stated in the draft law.

Therefore, Mr. Hung proposed to add regulations on the coordination responsibilities of the parties in handling, procedures, and measures for asset seizure that need to be public and transparent. This is to avoid credit institutions abusing their right to seize assets, affecting the legitimate rights of borrowers.

Source: https://vietnamnet.vn/can-quy-dinh-ro-truong-hop-nao-duoc-vay-lai-suat-dac-biet-0-tranh-truc-loi-2403084.html