Prime Minister urges banks to unblock capital flows without compromising safety

Prime Minister Le Minh Hung is urging banks to facilitate corporate capital flows without sacrificing credit standards. The focus is on transparent cash flows as the primary driver of sustainable economic growth. During a recent working session, the Prime Minister reviewed proposals to remove obstacles and regulatory constraints, aiming to boost capital supply and ensure macroeconomic stability.

The government and Deputy Prime Ministers have been issuing directives to the State Bank of Vietnam (SBV) to increase capital availability while maintaining strict credit quality and financial safety. Deputy Prime Minister Nguyen Van Thang emphasized that credit growth must be balanced with robust credit quality and systemic safety.

The SBV has implemented technical plans, such as raising the loan-to-deposit ratio to 50% and raising the short-term capital ceiling for medium and long-term lending to 40%. These measures have helped meet the capital demand for key national projects. However, simply increasing credit supply alone is insufficient. The economy's absorption capacity determines the effectiveness of capital flows.

Enterprises need to be evaluated more thoroughly based on debt repayment capabilities, business efficiency, and actual cash flows rather than relying solely on collateral assets. Banks can improve their evaluation methods by integrating legal data on taxes, electronic invoices, customs, and credit histories. While the SBV has been working to expand credit, medium and long-term capital demands remain high.

Therefore, the development of stock markets, corporate bonds, and alternative capital mobilization channels is crucial to distribute the financial burden on the credit system. On the corporate side, businesses must improve their financial transparency, governance capabilities, and capital utilization to obtain bank loans. Unblocking capital flows requires coordination among the government, banking sector, and businesses.

Dismantling legal bottlenecks outside the banking realm, such as land regulations, will help accelerate capital flow. Ultimately, credit growth and financial safety are not contradictory goals, but they must be pursued concurrently by increasing capital supply capabilities, absorption capacity, appraisal quality, and risk control.