He was responding to a question from a National Assembly (NA) deputy as he took the floor once again in parliament on Friday morning, after spending nearly three hours on Thursday during his first parliamentary Q&A session since assuming office.
Acknowledging the difficulties in keeping the exchange rate steady, Hung said the application of the “central exchange rate” mechanism since early 2016 had resulted in positive developments in the market and helped the central bank maintain its expectation on the stability of exchange rate in the future.
He said since the beginning of 2017, the central bank had bought more than US$7 billion in foreign exchange, raising the foreign exchange reserve to a record high of over $46 billion.
“With this scale of foreign exchange reserve and current management policies, keeping the exchange rate steady is definitely possible,” he said.
Tackling the issue of card payment security, Hung admitted that the number of frauds in payments through ATM cards has risen to an alarming level in Viet Nam, although the damage only amounted to one third of the global average.
He attributed the situation to loopholes in banks’ security and the failure of card users and card acceptors to protect information of individuals.
The central bank, therefore, has issued many policies and regulations, and increased monitoring of the bank card system to increase security, he said.
On the intricate cross-ownership in the banking system which has continued for a long time, the governor said the case of a group of large shareholders holding sway over bank operations has been identified and dealt with, making banks more transparent.
“So far, no individual owns more than 5 per cent of the total equity of a bank. The pairs of banks cross-owning shares of each other have reduced from seven in 2012 to two. The pairs of banks directly owning shares of each other have reduced from five to two,” he said.
He added that if the NA approves the draft law on credit institutions, the situation will be resolved more thoroughly. Besides this, the central bank would step up inspection to monitor banks’ shareholders and related people, and strictly deal with violations on share ownership, he said.
Responding to a question from deputy Bui Van Xuyen of Thai Binh Province on non-performing loans (NPLs), the governor said bad debt ratio until September this year was 2.34 per cent.
However, if potential NPLs and those sold to Việt Nam Asset Management Company were taken into account, the total value of NPLs amounted to VNĐ556 trillion ($24.5 billion), or 8.61 per cent of total outstanding loans, more than 1 percentage point lower than that at the end of last year.
Deputy Dang Ngoc Nghia from central province of Thua Thien – Hue asked whether the central bank could waive debts or reduce interest rates for the loans of victims of the recent typhoons 10 and 12 in the central region to ease their burden.
Hưng said the central bank had, in fact, instructed banks to estimate the damage of the disasters and restructure people’s debts. The Vietnam Bank for Social Policies would continue checks and reviews to waive or reschedule debts of disaster victims.
“If needed, commercial banks can ask the central bank and the Ministry of Finance to forgive their debts,” he said.
Responding to the concern that too much money had flowed into real estate, raising risk of a property bubble, the central bank governor said loans to the real estate sector amounted to VNĐ400 trillion, accounting for some 6.5 per cent of total outstanding loans.
He emphasised that the central bank had implemented several measures to control loans to this sector, including raising the risk weight for real estate loans, adjusting the ratio of short-term deposits for medium- and long-term loans and only allowing banks to offer loans to buy houses in projects for low and average income earners. —VNS
