The Governor of the State Bank of Vietnam speaks about the 'unprecedented' cash withdrawal incident at SCB.

Referring to the incident at Saigon Commercial Bank (SCB), Governor Nguyen Thi Hong stated that this was an unprecedented large-scale mass withdrawal incident, with ripple effects on the liquidity of credit institutions and the confidence of foreign investors.

On the afternoon of October 28, at the end of the discussion session in the National Assembly , Governor of the State Bank of Vietnam Nguyen Thi Hong To explain and clarify some issues raised by National Assembly deputies during the discussion session related to the real estate and capital sectors. credit.

Regarding access to credit, Ms. Hong stated that investment capital in the real estate market typically requires large sums and long terms, therefore it needs to be mobilized from multiple channels, and bank loans are just one channel.

Governor of the State Bank of Vietnam, Nguyen Thi Hong. Photo: Nhu Y.

According to regulations, credit institutions will independently decide on granting credit based on agreements with customers regarding loan amounts, terms, interest rates, etc.

In addition to conducting business according to their business objectives, credit institutions must always ensure compliance with the safety ratios prescribed by the State Bank of Vietnam; It is essential to ensure the recovery of capital to be ready to pay depositors; otherwise, it could have repercussions for the credit institution itself, as well as for the safety of the system and the economy .

"Therefore, even when there are feasible projects with the ability to repay loans, banks still refuse to lend because the loan term of the project may not be compatible with the bank's capital balance," Ms. Hong said.

According to the Governor of the State Bank of Vietnam, in the recent period, real estate credit It has increased very rapidly. Currently, outstanding real estate loans amount to 3.15 trillion VND, accounting for approximately 20% of the total outstanding loans in the economy.

Recalling the incident that "Members of Parliament still haven't forgotten" mass withdrawal at the Bank According to Ms. Hong of SCB, this was an unprecedented large-scale mass withdrawal incident, with ripple effects on the liquidity of credit institutions and the confidence of foreign investors.

At that time, State Bank of Vietnam The highest priority must be ensuring system security, specifically guaranteeing the ability to pay depositors to avoid a financial crisis.

“I recall that at the October 2022 session, the Governor, when speaking, also said that depending on the circumstances, the highest priority must be given. That is why the State Bank of Vietnam increased interest rates in October and did not expand credit limits, in order to ensure improved liquidity for the system.”

When the liquidity system improved, by December, the State Bank of Vietnam loosened credit limits, which brought about the stability we see today. At that time, the system itself... credit institutions "There is great concern that people will withdraw their money from their credit institutions. Therefore, credit institutions are very cautious when granting new loans, especially for long-term real estate projects," Ms. Hong said.

Governor Nguyen Thi Hong affirmed that the State Bank of Vietnam always directs credit institutions to save operating costs in order to further reduce lending interest rates, support businesses and people, and simplify loan procedures to save time and resources for businesses and people.

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