PM tells banks to keep system stable amid turbulence

Meeting with nearly 70 banking representatives Sunday, Chinh said Vietnam’s economy had a lot to thank the banking sector for its post-Covid recovery.

He said that amid complicated developments in the world, some of them unprecedented, the Vietnamese banking sector has made timely responses with flexible currency and financial policies to contain inflation and stabilize the macro-economy.

As Vietnam will continue to be exposed to global turbulence, the banking sector needs to identify challenges and opportunities to continue to adopt necessary measures to keep the system safe, he said.

The PM asked commercial banks to improve their capability in management and finance and maintain effective operations, adding that the government will support businesses in legal and healthy competition, while actions to abuse policies for group or personal interest will be strictly punished.

“We will protect [businesses] that operate righteously, and punish those who commit wrongdoings, in order to create a healthy business environment.”

Total credit in the banking system was near VND11,600 trillion ($480 billion) at the end of September, up 11% from the end of last year.

The system’s total assets are worth around VND7.5 trillion, 93% of which are at four state-owned commercial banks – Vietcombank, BIDV, Vietinbank and Agribank.

The PM’s meeting with the bankers happened after the State Bank of Vietnam spent the last week taking several different measures to respond to a run on deposits at the Saigon Commercial Bank, prompted by rumors spread on social media about the impact of a board member’s death and relations with property developer Van Thinh Phat Group, whose chairwoman has been arrested for bond fraud.

The central bank has promised to protect depositors and customers. It put the bank under special control on Friday and appointed its new chairman, a former Vietinbank director, and four new board members Saturday.