Improve the economy's ability to absorb capital, strengthen the connection between banks and businesses

Prime Minister Pham Minh Chinh has just signed Official Dispatch No. 990/CD-TTg dated October 21, 2023 on continuing to resolutely implement solutions to increase access to credit capital, remove difficulties for production and business activities and fulfill the task of collecting the state budget in 2023.

The dispatch clearly stated: In recent times, the Government and the Prime Minister have issued many Resolutions and documents directing ministries, agencies and localities to resolutely implement appropriate and effective solutions to improve the economy's access to and ability to absorb credit capital, resolve difficulties and obstacles, and promote socio- economic recovery and development. However, access to credit capital is still difficult, credit growth is low, reaching only 6.29% as of October 11, 2023, much lower than the same period in 2022 (11.12%) and the direction for the whole year of 2023 (14-15%); State budget revenue for the first 9 months is estimated to reach 75.5% of the yearly estimate.

Improve the capital absorption capacity of the economy and strengthen the connection between banks and enterprises, Figure 1 — The Prime Minister requested the State Bank to direct credit institutions to continue reducing lending interest rates. Illustrative photo

In order to promptly remove difficulties and obstacles, unblock and promote resources, improve the economy's ability to access and absorb credit capital, promote growth associated with maintaining macroeconomic stability, and strive to achieve the highest goals and targets of the socio-economic development plan and state budget for 2023, Prime Minister Pham Minh Chinh requested:

The State Bank of Vietnam presides over and coordinates with relevant ministries and agencies : Continue to thoroughly study, resolutely, effectively and promptly implement the tasks and solutions in Resolution No. 01/NQ-CP dated January 6, 2023 of the Government, Resolutions of regular Government meetings, directives of Government leaders and legal regulations, closely follow market developments to operate monetary policy proactively, flexibly, promptly and effectively, prioritizing promoting growth associated with macroeconomic stability, controlling inflation, ensuring major balances of the economy, safety of the credit institution system; operate monetary policy tools: exchange rates, interest rates, money supply... in a rhythmic, synchronous and effective manner to continue to remove difficulties, meeting the highest possible capital needs of the economy to promote production and business, create jobs and livelihoods for people.

Manage credit growth reasonably and effectively, strive to achieve the highest possible target as set, improve credit quality, direct credit to production and business sectors, priority sectors, growth drivers of the economy (especially investment, consumption, export), control credit for sectors with potential risks. Have policies to encourage credit to feasible projects and enterprises serving growth drivers.

Carefully review and resolutely and effectively implement the VND120,000 billion credit program for lending to investors and homebuyers of social housing projects, worker housing projects, projects to renovate and rebuild old apartment buildings, and the VND15,000 billion credit package for the forestry and fishery sectors; in which the key role of state-owned commercial banks and the active and creative participation of joint-stock commercial banks will be promoted.

Further promote administrative procedure reform, review and resolutely cut down on administrative procedures that are no longer appropriate and cause waste, inconvenience and increase costs for people and businesses. Resolutely, strongly and effectively implement solutions to create favorable conditions for businesses and people to access credit capital, improve the economy's capital absorption capacity, further strengthen the connection between banks and businesses; continue to support and effectively share with customers facing difficulties, promote the recovery of production and business activities. Guide and create conditions for the Bank for Social Policies to effectively implement preferential credit programs for the poor and other policy subjects.

According to the functions and authority, urgently review and evaluate the implementation of Circular No. 02/2023/TT-NHNN, Circular No. 03/2023/TT-NHNN, Circular No. 06/2023/TT-NHNN and related Circulars and regulatory documents to proactively and promptly review, amend, supplement, and issue new regulatory documents, especially mechanisms and policies that expire in 2023, in order to promptly remove difficulties arising in practice regarding access to capital for people and businesses, purchase and sale of corporate bonds by credit institutions, ensuring synchronization, efficiency, conformity with the actual situation, stabilizing the monetary market, and safety of the credit institution system in accordance with the Government's resolutions, directions of Government leaders and provisions of law.

Continue to direct credit institutions to review and reduce operating costs, simplify procedures and lending conditions, increase the application of information technology, digital transformation to continue reducing lending interest rates; deploy appropriate credit packages of commercial banks to support people and businesses to overcome difficulties, boost production and business, focusing on priority areas and growth drivers of the economy; promote the spirit, social responsibility and business ethics of the credit institution system, be more proactive and active in participating in implementing policies, promotional programs, socio-economic development plans, hunger eradication and poverty reduction, and ensuring social security.

The Ministry of Finance presides over and coordinates with ministries, agencies, and localities : Implementing and operating a reasonable, focused, key, and effective expansionary fiscal policy, coordinating synchronously, closely, and harmoniously with monetary policy to promote investment, especially non-state investment, boosting public investment to serve growth, stabilize the macro-economy, control inflation, and ensure major balances of the economy.

Continue to take active and effective measures to increase revenue and reduce expenditure; solutions on tax, fee, charge exemption, reduction and extension to support people and businesses according to the Resolutions of the National Assembly, the Government and the direction of the Government leaders. Proactively propose solutions on tax, fee and charge exemption, reduction and extension in 2024, submit to competent authorities for timely consideration and decision.

Resolutely implement solutions to strive to collect state budget revenue in 2023 exceeding the estimate assigned by the National Assembly. Direct tax and customs authorities to strengthen revenue management, prevent revenue loss, combat smuggling, trade fraud and tax evasion; focus on handling and recovering tax arrears, ensuring correct, full and timely collection; expand revenue bases, especially from e-commerce, food and beverage services, night-time economic activities...; strengthen the application of information technology, digital transformation, especially in tax collection from tourism, food and beverage services, entertainment; urge timely collection of receivables according to recommendations of inspection and audit agencies and competent authorities; promote tax inspection, examination and post-clearance inspection.

Carry out tax refunds quickly, promptly and in accordance with regulations, ensuring correct subjects and tax laws and policies.

People's Committees of provinces and centrally run cities : Based on the Government's Resolutions and the Prime Minister's direction, closely coordinate with the State Bank of Vietnam and credit institutions in the area to effectively implement solutions to improve access to credit capital for people and businesses, support businesses in developing production and business, promote economic recovery and growth; further promote administrative procedure reform, digital transformation, strengthen discipline and administrative discipline in performing public duties.

Closely coordinate with tax and customs authorities to strengthen the management of state budget collection, ensure correct, full and timely collection, prevent revenue loss, and handle tax arrears; proactively propose solutions and organize direction and drastic implementation, striving to exceed the assigned state budget collection estimate for 2023.

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