The State Bank of Vietnam (SBV) has urged domestic and branches of foreign credit institutions to offer a cut in loan interest rates for businesses affected by the acute respiratory disease caused by the SARS-CoV-2 (COVID-19) which is taking toll on the regional economies.
In response to the government's appeal, the SBV requested the commercial banks to review their borrowers and update how they are affected by the outbreak in order to provide them with necessary support.
The commercial banks were asked to delay repayments, cut loan interest rates and temporarily keep the affected borrowers in their current debt group. The policies are applicable to all epidemic-affected loans with repayment due between January 23 and March 31, the central bank said.
They will be valid until further notice from the SBV, it added.
To be eligible for the preferential policies, borrowers must make inquiries to the banks who then review their loans to assess the level of impact the epidemic has on them and their ability to repay the debts after a new repayment schedule is issued.
The banks must report to the SBV on the implementation and outcomes of the policies on March 15 and 31.
In Vietnam, debts are classified into five groups based on their risk level: standard debt, debt needing special attention, subprime debt, doubtful debt, and potentially irrecoverable debt.
Source: China ASEAN Business Council