Banks to reschedule debt payment for epidemic-affected customers

The SBV also reminded banks to choose the right customers to support and avoid potential abuse of supporting mechanisms.

Banks were told to consider rescheduling repayments, reducing interest rates and temporarily suspending debts for those affected by Covid-19 and have interest due between January 23 and March 31.

The central bank also asked banks to provide new loans to customers to stabilise their production and business.

Local banks then need to report back to the SBV between March 15 and March 31.

According to local banks, customers suffering the most were firms involved in transportation, storage, accommodation, tourism, restaurant and food service. Others include agricultural and fisheries companies whose major export market is China and those whose main materials are imported from China.

As those affected by the epidemic were banks’ major customers, risk of increasing bad debts in banks was clear. According to VPBank’s estimation, the total number of customers affected by Covid-19 was up to 1,000, and this may increase if the virus develops further.

Pham Toan Vuong, deputy director of Agribank, said that his bank had not estimated the number of affected customers and how much they suffered yet, but the virus certainly would affect debt repayments for their customers.

As agricultural exports to China have been impacted, bad debts at Agribank have increased, as 70 per cent of loans went to agricultural firms.