According to Tu, the surge showed the economy has positive signs and the daily life, production and business of people and firms have also returned to normal thanks to the Government's effective measures against the pandemic.

leftcenterrightdel
Deputy Governor of the State Bank of Vietnam Dao Minh Tu

''The increase is very high compared to previous years. At the end of the year, we will consider to adjust the credit growth to ensure it meet targets of macro-monetary policies and inflation control," Tu said.

According to the official, the credit growth target in 2022 that the SBV set at the beginning of this year was 14 percent. However, the target can be adjusted up or down at the end of the year, depending on the actual situation.

Regarding bad debts, Tu reported after five years of implementing Resolution 42/2017/QH14, the bad debt settlement of credit institutions has achieved positive results. Accordingly, from August 15, 2017 to November 30, 2021, 380 trillion VND of bad debt was recovered according to Resolution 42. On average, some 5.66 trillion VND of bad debt was handled each month during the application of Resolution 42, against about 2.14 trillion VND previously.

However, the outbreak of the COVID-19 pandemic has negatively affected the credit quality of the credit institution system. Bad debts have been increasing since 2020 and reached more than 2 percent by the end of November 2021. Many have warned bad debt will continue to rise again due to the pandemic’s impacts.

Meanwhile, Resolution 42 on piloting the bad debt settlement of credit institutions will expire this year. The SBV, therefore, has proposed to legislate the policies specified in Resolution 42 into a new law to continually enable the banking industry to settle bad debts of credit institutions. The issuance of a new law on bad debt handling will help credit institutions accelerate the handling of bad debts to avoid potential risks for the economy, according to Tu.

Source: VNA