Directive No. 06/2005/CT-NHNN on intensifying credit information activities to better serve state capital investment projects and prevent waste and loss in investment.

DIRECTIVE

On Strengthening Credit Information Activities to Better Serve Basic Construction Investment Using State Funds and to Prevent Wastefulness and Losses in Construction Investment

The Prime Minister issued Directive No. 21/2005/CT-TTg dated June 15, 2005 on implementing the National Assembly's Resolution regarding basic construction investment using state funds and preventing wastefulness and losses in construction investment. The State Bank has the responsibility to establish a credit information system for enterprises as a basis for banks to consider and decide on lending; to pilot a service for evaluating enterprise creditworthiness so that banks have a basis when considering loans to enterprises.

In recent years, credit organizations have effectively implemented lending for development investment, contributing to promoting sustainable economic growth in accordance with the National Assembly's and Government's resolutions on economic and social development tasks. At the same time, the State Bank of Vietnam has continuously consolidated and developed the Credit Information Center, forming a system for collecting and providing enterprise information to credit organizations to consider and decide on lending, thereby helping to limit risks in credit activities. To date, the credit information system has collected over 800,000 customer files with credit relationships at credit organizations, including 85,000 files of enterprise customers with a total outstanding balance of approximately 400 trillion VND. The number of inquiries by credit organizations has increased by 50% annually, averaging 200 inquiries per day, contributing to making banking operations "safe - effective - sustainable." The credit information system provides customer loan information and credit rating information for enterprises as a basis for credit organizations to consider and decide on lending, including for basic construction investment using state funds. However, it is necessary to enhance the operational capacity of the credit information system and particularly focus on utilizing information to avoid wastefulness, losses, and overdue capital in construction investment.

Implementing the Prime Minister's directives, the Governor of the State Bank instructs units under the State Bank and credit organizations to implement the following measures:

1. Consolidate and develop the State Bank's credit information system including: the Credit Information Center; the credit information department at the State Bank branch in provincial and centrally-administered city levels; credit information centers and customer information departments at credit organizations. Strictly implement the Governor's directives related to credit information and fully comply with the provisions of the Credit Information Operation Regulation issued together with Decision No. 1117/2004/QĐ-NHNN dated September 8, 2004 of the Governor of the State Bank.

2. The Credit Information Center focuses on analyzing and evaluating enterprise credit ratings, especially those in the basic construction investment sector, to provide credit organizations as a basis for consideration and decision-making on lending to mitigate credit risks. Promptly complete the proposal for establishing a Vietnamese enterprise credit rating company to be submitted to the Prime Minister.

Proactively coordinate with relevant units of ministries and sectors to exchange information about enterprises to enrich the database provided to credit organizations.

3. The State Bank Inspectorate, State Bank branches in provincial and centrally-administered city levels, and the Credit Information Center cooperate to urge and inspect credit organizations in reporting and utilizing credit information before considering and deciding on lending, particularly for basic construction investment projects using state funds; and take decisive measures against units violating wastefulness, losses, and non-recovery of capital.

4. Credit organizations need to recognize the importance of complying with reporting and utilizing credit information to serve lending for basic construction investment; before considering credit for basic construction investment projects using state funds, they must utilize credit information to prevent and mitigate credit risks, combat wastefulness and loss of capital. Credit organizations providing loans must bear joint responsibility for the results of project feasibility calculations leading to ineffective and unrecoverable loans.

Heads of Departments, Bureaus, units under the State Bank, Director of the Credit Information Center, Directors of State Bank branches in provincial and centrally-administered city levels, Chairmen of the Board of Directors, General Managers (Directors) of credit organizations are responsible for implementing this Directive.

This Directive takes effect 15 days from its publication in the Official Gazette. Any difficulties encountered during implementation should be reported to the State Bank (Credit Information Center) for timely resolution./.