Deputy PM’s Conclusions on Interest Rate Support Package

The Government Office has issued an announcement on Deputy Prime Minister Le Minh Khai’s conclusions at a meeting on the interest rate support package in accordance with the Government’s Decree No.31/2022/ND-CP dated May 20.

The two percent per year interest rate support program for a number of businesses, co-operatives, and business households was part of the economic recovery master program in 2022-2023.

Deputy Prime Minister Le Minh Khai speaks at the event (Photo VGP).

The Deputy PM assigned the State Bank of Vietnam (SBV) to work closely with ministries and agencies concerned to review the Decree, the SBV’s Circular, and guidelines, ensuring they are in line with the National Assembly’s Resolution No.43/2022/QH15 and the Government’s Report on fiscal and monetary policies in support of the socio-economic recovery and development program.

In case any too strict regulations are discovered, they must report to competent agencies for revision. He called for raising awareness of commercial banks, businesses, cooperatives, and business households about the package, as well as establishing inter-sectoral working groups led by the SBV to grasp the situation at commercial banks and tackle difficulties faced by them during the process.

The disbursement of the interest rate support program has remained limited after nearly three months of implementation (Photo: VNA). The Government has officially issued Decree 31/2022/ND-CP on interest rate support from the State budget for loans of enterprises, co-operatives, and business households. This decree provides interest rate support for loans in Vietnamese Dong arising from lending activities of commercial banks to customers that are enterprises, co-operatives, and business households according to Resolution 43/2022/QH15 dated January 11 of the National Assembly and Resolution 11/NQ-CP dated January 30 of the Government.

The State budget shall fully and promptly allocate funds for interest rate support for commercial banks to provide interest rate support to customers. Commercial banks provide interest rate support to ensure compliance with regulations, creating favorable conditions for customers.

The interest rate support applies to interest payment obligations at interest payment terms that arise during the period from the effective date of this decree to December 31 next year.

Commercial banks will stop supporting interest rates after December 31 next year or when the funding source runs out, whichever comes first.

The loan with interest rate support is a loan in Vietnamese Dong, with a loan agreement signed and disbursed in the period from January 1 this year to December 31 next year, using the capital for the right purpose under the provisions of Clause 2, Article 2 of this decree and have not yet received interest rate support from the State budget according to other policies.

The interest rate support period is from the date of loan disbursement to the time when the customer pays off the loan principal and/or interest as agreed between the commercial banks and the customers, in line with the funding source for interest support rates announced, but not exceeding December 31 next year.

The support interest rate for customers is 2 percent per year, calculated on the loan balance.

It took a long time from discussion to decision. Since the decision had been issued, businesses have been looking forward to deploying it soon so that they could have more financial resources. In 2022, more than 16,000 billion VND is requested from the 2% interest rate support package, cited from Binh Duong News.

The State Bank of Vietnam (SBV) held an online conference on Jul 06, 2022 to implement the Decree 31/2022/ND-CP (Photo: Binh Duong News).

Last month, the State Bank of Vietnam (SBV) held an online conference to implement this Decree. Permanent Deputy Governor of the SBV Dao Minh Tu stressed that up to now, commercial banks have completed the registration of interest rate support plans, which the SBV has summarized and proposed to the Ministry of Planning and Investment and the Ministry of Finance to report to the competent authorities to additionally assign public investment plan in 2022 (nearly VND 16,035 billion), arrange public investment plan in 2023 (over VND 23,965 billion), and the SBV has also had the Announcement of the expected interest rate support limit in 2022 to each commercial bank for early implementation of the policy.