Governor of the State Bank explains the policy of special loans without collateral, 0% interest rate

Delegate Nguyen Huu Thong - Binh Thuan delegation - is concerned that the regulation of 0% interest rate/year, if not attached to specific application conditions, could lead to policy abuse.

On the morning of May 29, the National Assembly discussed in the hall the draft Law amending and supplementing a number of articles of the Law on Credit Institutions.

This draft law adds the authority to decide on special loans of the State Bank of Vietnam (SBV). Accordingly, SBV is allowed to decide on special loans with or without collateral with credit institutions (CIs). The interest rate for special loans is 0%/year.

Under current law, the authority to decide on special loans with an interest rate of 0%/year and unsecured loans belongs to the Prime Minister .

Commenting on this content, delegate Nguyen Huu Thong - Binh Thuan delegation - assessed that the regulation on special lending interest rate of 0%/year is a strong support policy, clearly demonstrating the role of the State Bank in supporting credit institutions in particularly difficult situations, in order to maintain the safety of the financial and banking system.

However, according to this delegate, the regulation of 0% interest rate/year, if not attached to specific application conditions, can lead to policy abuse, create risks, distort the competitive environment between credit institutions and increase pressure on the national budget.

Delegate Nguyen Huu Thong - Binh Thuan delegation

"This regulation is likely to contradict market principles, affecting the efficiency of using State resources if there is no control mechanism," delegate Huu Thong worried.

From there, delegate Thong suggested that the 0% interest rate should only be applied to credit institutions under special control, mandatory restructuring or having an impact on national financial stability. At the same time, it is necessary to add a mechanism to monitor, publicize and evaluate the effectiveness of the use of this special loan source.

Explaining to the National Assembly, Governor of the State Bank Nguyen Thi Hong said that regarding the adjustment of the authority to grant special loans without collateral and at 0% interest rate, according to the 2024 amended Law, the authority to grant these special loans will be assigned to the Prime Minister. However, in practice, with the development of technology and credit institutions, along with people withdrawing money not only through banks but also in other forms, this content should be considered and adjusted by the Government in a timely manner.

Governor Nguyen Thi Hong added that lending without collateral and at 0% interest is not a regular, continuous case . Only when credit institutions need to intervene will they include this special loan category.

According to the Governor, the collateral of credit institutions is mainly customers' credit records or valuable, highly liquid assets such as government bonds...

Regarding special lending standards and conditions, in reality, the operational situation of banks is different. According to Governor Nguyen Thi Hong, mass withdrawal incidents often occur not due to the weaknesses of credit institutions but due to many objective factors such as rumors, technological incidents, etc.

"Therefore, special lending standards and conditions also need to be considered flexibly, suitable for each specific case. The drafting agency will continue to research and perfect these regulations," said Ms. Nguyen Thi Hong.

On the morning of May 29, the National Assembly discussed in the hall the draft Law amending and supplementing a number of articles of the Law on Credit Institutions.

Governor Nguyen Thi Hong once again emphasized: "Determining special lending interest rates is very difficult and irregular, mainly to ensure the safety of the monetary system. The drafting agency will continue to study appropriate solutions, while considering the opinions of the delegates."

In addition, regarding bad debt settlement and protection of the interests of all parties, the Governor of the State Bank said that legalizing regulations on bad debt settlement will help increase efficiency and better protect the interests of lenders, borrowers and credit institutions. This will contribute to stabilizing the financial system, creating conditions for credit institutions to reduce interest rates and develop their operations.

Source: https://phunuvietnam.vn/thong-doc-ngan-hang-nha-nuoc-giai-trinh-ve-chu-truong-cho-vay-dac-biet-khong-tai-san-bao-dam-lai-suat-0-20250529104242655.htm