DECISION

APPROVING THE SCHEME ON INCREASE OF ACCESSIBILITY TO BANKING SERVICES FOR THE ECONOMY

THE PRIME MINISTER

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions;

Pursuant to the overall strategy on development of Vietnam’s service sector through 2020 approved by the Prime Minister in Decision No. 175/QD-TTg of January 27,2011, and Decision No. 808/QD-TTg of June 29, 2012, promulgating the program of action to implement the overall strategy on development of Vietnam’s service sector through 2020;

At the proposal of the Governor of the State Bank of Vietnam in Report No. 112/TTr-NHNN of July 25, 2016,

DECIDES:

Article 1. To approve the Scheme on increase of accessibility to banking services for the economy, with the following principal contents:

I. OBJECTIVES

To increase the accessibility to basic banking services of quality, at affordable cost and according to demand of an overwhelming majority of the population of maturity age and enterprises, especially residents in rural, deep-lying and remote areas, small- and medium-sized enterprises, based on the system of credit institutions operating in a safe, sound and responsible manner and developing in a sustainable manner.

By 2020, to strive to achieve the following major targets:

- 70% of the mature population to have payment accounts in the banking system;

- At least 20 branches and transaction offices of commercial banks per 100,000 mature people;

- 30,000 ATMs (some 40 ATMs per 100,000 mature people);

- 300,000 POSs (some 400 POSs per 100,000 mature people);

- The rate of branches and transaction offices of commercial banks operating in rural areas to reach around 15%;

- 35-40% of mature rural residents to have savings at credit institutions;

- 50-60% of operating small- and medium-sized enterprises to take out loans from credit institutions;

- To double the proportion of revenues from non-credit services to total revenues of commercial banks.

II. PRINCIPLES AND SOLUTIONS FOR INCREASING ACCESSIBILITY TO BANKING SERVICES FOR THE ECONOMY

1. Principle of increase of accessibility to banking services:

a/ To expand the accessibility to banking services for the economy in association with the restructuring of the system of credit institutions, respect for market rules, equality, convenience and creation of conditions for both service providers and users;

b/ The State shall create an open legal framework to support credit institutions to design and develop many banking service products, especially non-credit ones, creating conditions for the population and enterprises, especially policy beneficiaries, to have sustainable access to banking services;

c/ To encourage the involvement of various types of credit institutions to provide banking services for rural, deep-lying and remote areas and support small- and medium- sized enterprises;

d/ To step up the application of information technology in the modernization and development of diverse banking products and services toward simplicity, convenience, high accessibility and satisfaction of the needs of low-income residents in rural, deep-lying and remote areas;

dd/ To expand the accessibility to banking services along with protecting legitimate interests of banking service customers ensuring harmony between interests and sustainable development of the system of credit institutions; to raise financial knowledge for the population;

e/ To encourage the participation of socio-economic organizations in the process of increasing accessibility to banking services in rural areas in the capacity as partners of credit institutions.

2. To implement in a coordinated manner 7 groups of solutions to increase accessibility to banking services for the economy:

a/ To improve institutions and policies and create an environment conducive to the development of various banking service products, especially non-credit ones, which are financially sound in the process of restructuring the system of credit institutions

- To improve the legal framework on the licensing of the provision of banking service products, especially new services like monetary brokerage, financial counseling, asset management, etc;

- To improve the legal framework on products and services like products derivative of commodity prices, entrustment and entrustment undertaking services, insurance agency and business, asset management, enterprise finance counseling services, etc., to create conditions for credit institutions to provide sufficient, diverse financial services meeting the increasing demand of the economy;

- To continue developing in depth markets in support of financial services such as interbank monetary market, interbank foreign currency market, corporate bond market; to step by step create a foundation for the formation and development of derivative markets;

- To continue restructuring credit institutions, increase financial capability, renovating and developing the banking governance system in line with international principles, standards and practices on modem banking governance, focusing on raising the effectiveness of risk management, control and internal audit systems;

- To renovate and increase the effectiveness of banking inspection and supervision work in conformity with international practices and standards and Vietnam’s practical conditions, ensuring an open environment for credit institutions to play a dynamic and creative role in diversifying financial services and products provided for the economy while controlling risks in the entire credit institution system.

b/ To expand the network of provision of banking services by credit institutions, attaching importance to increasing the operational capacity and efficiency of the Social Policy Bank, and to develop according to a reasonable roadmap the system of people’s credit institutions and microfinance institutions

- To work out a masterplan on development of the network of branches and transaction offices of credit institutions in line with the socio-economic development level, population size and number of enterprises in different areas across the country;

- To encourage credit institutions to establish branches, transaction offices and agency banks to operate in rural, deep-lying and remote areas and industrial parks to meet the economic demand of localities and in line with business orientations of credit institutions;

- To encourage commercial banks to employ modem technologies to create distant channels of provision of banking products and services such as developing electronic banking services, developing banking services based on the application of information and telecommunications technologies (mobile banking and internet banking services);

- To organize and re-arrange the installation of ATMs and POSs in places where conditions permit such as hospitals, shops, supermarkets, and district and commune centers to meet the people’s demand. To attach importance to increasing the quality of the card payment system, creating the most favorable conditions for card service users;

- To raise the quality of operation at commune transaction points of the Social Policy Bank, especially in rural, mountainous, deep-lying and remote areas. To continue deploying and increasing the quality of products and services, and provide more effective support for poor households, near poor households and other policy beneficiaries;

- To formulate and implement the Scheme on development of the system of people’s credit institutions through 2020. The establishment of new people’s credit institutions shall be considered prudently based on practical demand and full satisfaction of conditions prescribed by law; to prioritize the formation of people’s credit funds in agricultural and rural areas where there is no people’s credit fund, and the formation of people’s credit funds to serve traditional industries and trades;

- To speed up the implementation of the Scheme on formation and development of the microfinance system to serve the poor, low-income earners and the disadvantaged in the society that have no condition to access banking services; to create conditions for organizations with microfinance activities to access foreign donations and aid and preferential credit sources; to apply international practices to microfinance services not regulated by domestic law.

c/ To attach importance to applying informatics and telecommunications technologies to developing products and services with a view to increasing the accessibility to banking services for residents in rural, deep-lying and remote areas

- To further direct credit institutions to properly implement credit institutions as directed by the Government, provide banking products and services according to formalities that are simple, easy to understand and appropriate to the demand of the overwhelming majority of rural population, actively support the hunger eradication and poverty reduction and the building of the new countryside;

- To formulate and effectively implement the Scheme on intensifying the non-cash payment in the 2016-2020 period, develop a number of forms of non-cash payment using high technology in rural Vietnam, attaching importance to applying on a wide scale new modes of payment suitable to the conditions and characteristics of rural, deep-lying and remote areas;

- To step up the provision of the service of calculation and collection of charges via bank account for such public services as tax, electricity and water charges, school and hospital fees and payments for social welfare programs;

- To formulate mechanisms and policies to encourage the connection and provision of payment services of the Cooperative Bank and people’s credit funds; to expand this payment connection nationwide according to the operation principles and objectives of people’s credit funds;

- To concentrate social policy credit sources originating from the state budget into the Social Policy Bank as the focal point to grant loans to the poor and other policy beneficiaries. To prioritize the Social Policy Bank to boưow or receive advances from idle capital sources with low or zero interest rate on the basis of balancing sources from the budget, ODA, aid or other cheap capital sources;

- To formulate policies to step up the provision of products of receiving savings according to the peculiar characteristics of the Social Policy Bank, creating conditions for the poor to save their own capital and step by step access and have higher demand for use of banking products and services. To study and finalize transaction content, making the best use of facilities available in communes, promote the application of modem technology, striving to apply the online provision of such products and services as payment and capital raising services and provision of banking products and services at transaction points of the Social Policy Bank in order to increase the access to and use of banking services in rural, mountainous, deep-lying and remote areas;

- Local administrations at all levels should direct and closely coordinate with the head office and branches of the Social Policy Bank in integrating programs and projects on production and business, restructuring, selection of plants and animals, and trades, programs on technology transfer, industrial extension, agricultural extension, forestry extension and fisheries extension and market orientation in association with the implementation of policy credit, helping borrowers use their loans effectively and sustainably escape from poverty;

- Credit institutions shall proactively coordinate with socio-political organizations at the grassroots level in the provision of services in rural areas.

d/ To increase the service provision capacity of credit institutions with respect to small- and medium-sized enterprises

- To revise and issue the Regulation on grant of loans of credit institutions to customers as the basis for these institutions to renovate the process of grant of loans toward simplifying formalities while ensuring safety of loans and compliance with law;

- To organize activities of research, training and support for credit institutions to acquire experience in grant of loans to small- and medium-sized enterprises; to boost services of counseling on finance and credit for credit institutions in order to support small- and medium- sized enterprises in the formulation of effective and sustainable business strategies and plans;

- The State Bank of Vietnam shall coordinate with specialized ministries in supporting credit institutions in developing the grant of loans by value chain from provision of credit for procurement to production, processing and sale or export of goods of associated groups of small- and medium-sized enterprises or acting as satellites in the chain of provision of services and production of goods for large enterprises, FDI enterprises or multinationals;

- To encourage non-bank credit institutions to provide products and services suitable to different needs of small- and medium-sized enterprises; to expeditiously restructure financial leasing companies to develop more credit products for small- and medium-sized enterprises in the form of lease-purchase; to encourage microfinance institutions and people’s credit funds to improve their capacity to provide services for small-sized and micro enterprises.

dd/ To raise the quality of information about customers, supporting credit institutions to access adequate information in order to increase credit quality

- To raise the quality of information and statistical work at agencies in charge of enterprises: The Enterprise Registration Management Agency (the Ministry of Planning and Investment), the General Department of Taxation and General Department of Customs (the Ministry of Finance); to complete the integration of existing data systems into a unified data system on small- and medium-sized enterprises to serve financial institutions, enterprises, management agencies and the public in accessing and searching for enterprise information in accordance with law;

- To properly implement the roadmap set out under the Scheme on development of a national credit information center approved in Decision No. 1033/QD-NHNN of May 26, 2014; to expand the collection of data on people’s credit funds, microfinance institutions and the Social Policy Bank to become a complete data center on credit relations of customers;

- To devise and implement solutions to enable finance institutions to exploit data in the national database on population to serve the verification of customers’ personal details, ensuring convenience and safety of the provision of banking services and ensuring conformity with law.

e/ To step up communication about the banking sector, advertise banking products and services to the overwhelming majority of the population in rural, deep-lying and remote areas, increasing connection between banks and enterprises

- To step up the communication work of the State Bank of Vietnam and credit institutions via the mass media to the population and enterprises;

- Credit institutions shall take the initiative in coordinating with socio-economic organizations in localities, especially women’s union, farmers’ association, youth union, etc., in advertising banking products and services to residents in rural, deep-lying and remote areas;

- To continue organizing conferences on connection of banks and enterprises nationwide. To set up channels to provide information about banking activities through investment and trade promotion activities and activities of the Small- and Medium-Sized Enterprises Association, publishing manuals on access to loans and other banking services for small- and medium-sized enterprises;

- To improve and develop channels of provision of information on banking services of credit institutions for easy access by customers such as websites, free calls, compiling and publishing many manuals for individuals, households and enterprises to access and use services as well as loans from credit institutions;

- To formulate and implement programs on dissemination of basic knowledge about finance and banking in order to raise public knowledge about banking services such as loan, interest rate, method of calculating interest, service charge, rights and obligations in transactions with banks, etc.

g/ Support solutions

- To step up the implementation of policies on investment in infrastructure for villages, communes and districts under Resolution No. 30a/2008/NQ-CP on support of fast and sustainable poverty reduction in 64 poor districts, Program 135 in the 2016- 2020 period on investment in support of infrastructure and production development in extremely advantaged communes, border communes, safety-zone communes, extremely disadvantaged villages, and the National Target Program on building the new countryside in the 2010-2020 period with a view to substantially improving living standards and increasing production and business efficiency of residents in rural, deep-lying and remote areas, creating a basis for expanding the people’s needs for banking services;

- To improve insurance mechanisms and policies in agricultural production, creating positive improvements in the use of agricultural insurance, contributing to reducing credit risks in agricultural and rural development;

- To draw up and implement a plan on development of small- and medium-sized enterprises in the 2016-2020 period; to implement solutions to increase the effectiveness of production and business activities and improve the financial and governance capacity and observance of market discipline for small- and medium-sized enterprises;

- To raise the financial capacity of credit guarantee funds for small- and medium-sized enterprises, ensuring that the budgets of provinces and centrally run cities grant minimum charter capital for the funds under regulations; to adopt mechanisms to attract small- and medium-sized enterprises and their associations in the provinces and cities to contribute capital to and participating in the management and governance of the fund operation;

- To increase the effectiveness of operation of the Fund for Guarantee of Credit for Small- and Medium-Sized Enterprises in the direction: shortening administrative procedures; expanding the giving of advice on financial governance, issuance of bonds; to closely coordinate with credit institutions in the appraisal, approval and disbursement of loans and control of granted loans in order to create conditions for small- and medium- sized enterprises to access capital and increase revenues for the Fund;

- To improve the law on security assets, develop a law on registration of assets in order to have a unified, transparent, public and stable asset registration system; to quickly and synchronously organize the grant of certificates of land use rights and ownership of land-attached assets; to supplement and complete policies and regulations on bankruptcy in order to protect the lawful rights of secured creditors when borrowers fall bankrupt or lawful rights of creditors to future assets, assets after merger or consolidation or created from loans;

- To study and develop on a pilot basis the method of online registration of transactions secured with land use rights and land-attached assets in order to save time and cost for people and enterprises when carrying out the mortgage registration procedures for this type of asset;

- To build a centralized database on secured transactions for all types of assets, including land use rights, land-attached assets, aircraft, seagoing ships and other movables, contributing to creating favorable conditions for the people and enterprises to search information about the legal status of assets;

- To study and develop a system of criteria for financial access in conformity with international criteria, including data on households, individuals, enterprises, and urban and rural areas; to conduct surveys for collecting statistical data on access to financial and banking services to serve the completion and formulation of policies on increase of access to banking services.

III. ORGANIZATION OF IMPLEMENTATION

1. The State Bank of Vietnam shall assume the prime responsibility for, and coordinate with related ministries, sectors, localities and units in, organizing, monitoring and urging the implementation of the above-mentioned solutions; annually review and evaluate the implementation and report implementation results to the Prime Minister; propose solutions to difficulties and problems; and organize a final review in the end of 2020.

2. Ministries, sectors and localities shall base themselves on their assigned functions and tasks to proactively and closely coordinate with the State Bank of Vietnam in directing and organizing the implementation. To perform the tasks assigned in the Plan to perform some major tasks to implement the Scheme on increasing access to banking services for the economy issued together with this Decision. Before December 15 every year, they shall send reports on implementation results to the State Bank of Vietnam for summarization and report to the Prime Minister.

Article 2. This Decision takes effect on the date of its signing.

Article 3. The Governor of the State Bank of Vietnam, ministers, heads of ministerial- level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall implement this Decision.-