The Vietnamese Government would start providing an interest subsidy of 2% per annum on commercial loans for businesses, cooperatives, and households for the 2022-2023 period.

The interest subsidy policy is part of the overall socio-economic recovery program for the 2022-2023 period. Photo: The Hanoi Times

The support, estimated at a maximum of VND40 trillion (US$1.76 billion), was revealed in the recently issued decision No.422 of the State Bank of Vietnam (SBV) and remains part of the Government’s socio-economic recovery program worth VND350 trillion ($15.4 billion) to aid the economy.

One of the key objectives of the decision is for the SBV to manage the monetary and credit policies flexibly, stabilize macro-economic conditions and contain inflation.

“The SBV is committed to providing sufficient capital for businesses, but at the same time tightening credit into risky fields,” the decision noted.

In addition, the SBV also informed that it will allow commercial banks in which the state is holding over 50% stake to raise registered capital while stepping up efforts to ensure the financial security of credit institutions and resolve bad debts.

The SBV calls for banks to further streamline operational expenses and cut lending rates by 0.5-1 percentage points, as well as rescheduling debt payment and waiving/freezing lending rates for those affected by the pandemic.

In early 2022, the National Assembly issued Resolution No.43/2022/QH15 on monetary and fiscal support programs worth a combined total of VND350 trillion (US$15.4 billion) to aid economic recovery and adaptation to a new normal.

These include a fiscal support package of VND291 trillion ($12.8 billion) and a monetary one of VND46 trillion ($2 billion).