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How do you assess the new regulations in the bank's special lending mechanism?
Through this Circular, I see a clearer spirit of progress and decentralization compared to the old regulations, in line with the specific implementation of the amended and supplemented Law on Credit Institutions of 2025. Previously, special lending, especially unsecured special lending in situations where credit institutions were weak or experiencing mass withdrawals, was under the authority of very high levels; but in the new framework, the authority is transferred to the Governor of the State Bank of Vietnam and, in some cases, the Director of the Regional State Bank of Vietnam, allowing for proactive response according to practical developments.
Decentralization is a key factor, giving direct responsibility to the "sector leader," thus enabling much faster processing. But what I want to emphasize is that the new regulations are not only "fast" but also safe, as they have clearly defined operating principles and conditions: special loans are denominated in VND, there is a priority repayment mechanism, and core parameters such as the purpose of capital use, term, and interest rate all have a control framework.
A notable point is the targeting of intervention in the case of mass withdrawals: special loans can only be used to pay individual deposits, while payments to organizations must be considered and decided on a case-by-case basis, based on proposals from the Special Supervisory Board.
Furthermore, the procedures outlined in the Decision have been streamlined to standardize documentation, clarify processing lines, and ensure timely intervention to safeguard the system. Simultaneously, regulations regarding terms and interest rates (such as the principle of terms under 12 months and 0% annual interest in certain cases) contribute to increased effectiveness of this special lending tool in emergency situations.
What is your opinion on the regulation requiring the addition or replacement of collateral when its value falls below the principal balance?
Article 14, Clause 3, Point c of Circular 35/2025/TT-NHNN requires that, at the time of applying for a special loan, credit institutions must ensure that the total value or the total converted value of eligible collateral is not lower than the amount of the special loan requested. This can be considered the foundation for the safe operation of the special lending mechanism.
The circular also stipulates that if the total converted value of the collateral is lower than the outstanding principal balance, the borrower must supplement or replace it to bring the total value to "not lower than" the outstanding principal balance.
Of course, the regulations are "rigid" on paper, but there is still flexibility in implementation within the framework. This flexibility doesn't mean lowering safety standards, but rather organizing implementation according to each situation based on the approved recovery or mandatory transfer plan: from monitoring and evaluating collateral conditions to supplementing or replacing collateral (including to continue disbursing funds). Thanks to this, disbursement and recovery can closely follow the plan's schedule, providing timely liquidity support while maintaining system safety and discipline.
According to him, what is the significance of allowing other credit institutions to participate in special lending?
The mechanism allowing other credit institutions to participate in lending is a significant step forward, as it helps expand and diversify the resources supporting weak credit institutions. The State Bank of Vietnam remains the "pillar" with its role as lender of last resort and overall coordinator, but with the participation of banks with strong financial capacity and good governance, the ability to intervene will be more flexible and timely, especially during periods of liquidity stress or widespread mass withdrawals.
What I appreciate is that the support isn't just about money, but also about governance capacity. A weak credit institution usually needs a whole restructuring process, so the support of "healthier" banks—in terms of risk management, operations, and internal control—can help build and implement a more substantive recovery plan, instead of just addressing the symptom of liquidity shortage.
However, in all cases, the State Bank of Vietnam must still play a leading role: arranging, coordinating, and selecting appropriate support organizations. This also sends a strong signal to the market: handling weak credit institutions should not only be done through administrative orders, but should involve the participation of banks based on their assessments and capabilities. As a result, the internal reform process will be more positive, contributing to strengthening the confidence of depositors, shareholders, and investors, and in the long term, improving the operational quality of weak credit institutions.
Thank you very much, sir!
Source: https://thoibaonganhang.vn/chuan-hoa-co-che-cho-vay-dac-biet-175380.html
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