Digital transformation for SMEs

PHuong anH

BIDV signs cooperation agreement with VNU

On April 5, 2021, BIDV and Vietnam National University, Hanoi (VNU) signed a cooperation agreement with a focus on 5 areas: human resources training and development; scientific research; provision of modern and convenient banking products and services; funding investment projects and social security.

Assoc.Prof. Dr. Nguyen Kim Son, Director of Vietnam National University, Hanoi and Mr. Phan Duc Tu - Chairman of the Board of Directors of BIDV represented the two parties to sign the agreement.

Under the cooperation agreement, in the period of 2021-2025, BIDV will implement scholarship programs for students, facilities, and fund science and technology projects and hi-tech banking studies within VNU. For VNU, it will support BIDV to cooperate, approach and introduce the bank's products and services to its affiliates, staff and students.

Both parties particularly emphasized the importance of maintaining and increasing cooperation in recruitment, research and training. Accordingly, VNU will deploy training for BIDV staff as well as providing human resources for BIDV. BIDV will provide internships for VNU students, and cooperate with VNU to implement training programs for BIDV.

Previously, in the 2013-2020 period, BIDV and VNU signed a multi-area cooperation agreement. BIDV is the bank with the most comprehensive cooperation with VNU, providing the highest level and largest scope of services to VNU and its affiliates.

Defining VNU as an important strategic partner, BIDV provides VNU with premium quality products and services, improving management and service level in the relationship with VNU. Given the existing advantages of BIDV and VNU, both parties agreed to continue to strengthen the close, effective and practical cooperation in all areas, aiming to serve the economic, social and cultural development of the country.

This signing ceremony marks a new milestone in the relationship between VNU and BIDV, laying solid foundations for the two to further deepen the cooperation in the digital age.

Leades of BIDV and VNU shake hand after signing the cooperation agreement

anH Duy

Aiding customers impacted by pandemic

The State Bank of Vietnam (SBV) has decided to extend a policy allowing commercial banks to keep debt classifications for Covid-19 affected borrowers unchanged to help customers access bank loans.

Circular 03/2021/TT-NHNN, which amends Circular 01/2020/TT-NHNN allowing commercial banks to maintain the debt classifications to support customers affected by the Covid-19 pandemic, will take effect from 17 May 2021.

In Vietnam, debts are currently classified into five groups including: standard, special attention, substandard, doubtful, and loss.

Previously, many commercial banks were worried if debt classifications were not extended, bad debts would increase sharply.

Banks had restructured loans worth about VND350 trillion (USD15.2 billion) for Covid-19-affected borrowers by the end of 2020. Industry insiders estimated if half of the loans became bad loans, the bad debt ratio of the banking system would increase to more than 3 percent by the end of this year. However, commercial banks this year will not be permitted to add profits gained from the loans to their total revenue, according to the new circular.

To qualify for maintaining the debt classifications, the debts must arise from lending and financial leasing activities with the obligation to repay the principals and/or interest from 23 January 2020 to 31 March 2021.

Besides, borrowers must be unable to pay the debts and/or interest in time due to decreases in revenues and incomes caused by the impacts of the pandemic. Despite the extension of the debt classifications, the new circular states commercial banks must set aside money for potentially unrecoverable Covid-19 affected loans within three years, starting from 2021.

Under the new circular, the ratio of the provisions will increase gradually from 30 percent of Covid-19-affected loans by the end of 2021 to 60 percent by the end of 2022 and 100 percent by the end of 2023.

A transaction office of BIDV in Hanoi