Techcombank has announced a comprehensive support package worth VNĐ30 trillion (US$1.27 billion) for both individual and enterprise customers that are heavily impacted due to COVID-19. Vishal Shah, Head of Business Banking Division at Techcombank talked more about the package.
Vishal Shah, Head of Business Banking Division at Techcombank
Which will be the main customer groups of this VNĐ30 trillion support package?
As the number of COVID-19 cases increases sharply in the EU and the US, all people living in Việt Nam (locals and expatriates living in Việt Nam alike) as well as in the world have appreciated the strong efforts of the Vietnamese Government in ensuring early detection and proactive prevention of COVID-19. As of April 16, 2020, Việt Nam had 268 reported cases of which 171 have been cured and discharged from hospitals. With this proactive approach, Việt Nam has ensured that the COVID-19 infection rate is well controlled.
Facing the increasingly complicated situation of the COVID-19 pandemic, which has caused significant impact on the global economy including Việt Nam, the Government, State Bank of Việt Nam (SBV) and Vietnamese financial services industry, at large, have announced various support measures and pragmatic solutions to support customers, as well as ensure financial stability and contuinuing flow of credit.
Techcombank is an active player in this fight, and has proactively embraced the direction of the Government and SBV. We have announced a comprehensive support package worth VNĐ30 trillion for both individual and enterprise customers that are heavily impacted due to COVID-19. The support package includes interest reduction, introduction of preferential interest rates as well as debt rescheduling at suitable terms thereby helping our customers mitigate the negative impact on account of COVID-19.
What conditions do the individual and corporate customers need to meet to qualify for low-interest loans or rescheduling, postponing debts?
Since the initial stage of the COVID-19 outbreak, Techcombank conducted an assessment of industries and enterprises that are most likely to be affected. We believe, enterprises that have significant import and/or exports to the EU and the US, as well as in agriculture, textile and garments, travel and related services have been most impacted. Enterprises that employ large numbers of expats/ foreign employees, have also been impacted due to the prevailing travel restrictions.
We have engaged our enterprise customers to understand their needs and difficulties, and implemented policies in line with direction of SBV to support the impacted customers during these unprecedented times.
Embracing the policies of the Government and SBV, Techcombank has announced a comprehensive support package worth VNĐ30 trillion that covers interest reduction, introduction of preferential interest rates as well as debt rescheduling at suitable terms with a view to ease the financial hardship and cash flow for affected individuals and enterprise customers.
The support package is comprehensive with VNĐ10 trillion allocated for individual customers and VNĐ20 trillion for our enterprise customers. The package is available for customers that meet the conditions prescribed in Circular 01/2020/TT-NHNN. In addition, Techcombank will consider reduction in lending rates for customers affected by the COVID-19 outbreak by up to 2 per cent per annum. The Bank is also committed to securing sufficient credit to support businesses that may have limited to no impact and will continue to support them for their working capital and business expansion funding needs.
The central bank requests banks to reduce operating costs to decrease interest rates. How does Techcombank plan to reduce this operating cost?
As the number of COVID-19 cases increases, many individuals and enterprises, are opting for cashless payments which ensure there is no direct contact and potential hygiene issues arising from handling banknotes, which in turn may help reduce the spread of COVID-19. Techcombank has been a pioneer in digital banking services for individuals and enterprises and have also offered zero fees for all domestic payments initiated through our online and mobile banking platforms to individual customers since 2016, and enterprise customers since 2018.
Developing and offering leading digital banking solutions and services is one of our key transformation initiatives, with the goal of being convenient, fast, safe and ensuring cost savings for our customers and the bank. Techcombank has continually made two major investments in parallel: Investing in technology to ensure our systems are stable, safe and secure; and simultaneously reduce operation costs for individuals and businesses. Since July 2018, we have offered zero fees for all electronic fund transfers for our enterprise customers and were one of the first banks to launch this thereby ensuring cost savings for our customers.
In March 2020, we successfully deployed our enhanced version of corporate online banking viz. F@st Ebank whereby our enterprise customers can now buy and sell foreign currencies online as well as initiate overseas remittances from the convenience of their office and home. Additionally, we are offering up to 50 per cent discount on fees for international remittances initiated via F@st Ebank.
In addition to providing discounted rates for international remittances via F@st Ebank, we are also offering preferential foreign exchange rates. This solution will particularly benefit enterprise customers who are engaged in import-export activities as they can conduct transactions easily and optimise their business costs, thereby reducing difficulties in this epidemic time. In a short span of one month since launch, over 1,000 enterprise customers have successfully registered for this service.
Techcombank is committed to securing sufficient credit to support our enterprise customers that may have limited or no impact and will continue to support them for their working capital and business expansion funding needs.
What is Techcombank's solution to support customers in parallel with ensuring the risk of overdue debts?
Techcombank has a robust risk management approach with a multi-level credit risk management model in place, ensuring adequate controls at the time of assessing the loan request as well as strong post lending controls that facilitate identification of customers that may have early warning signals thereby enabling the bank to proactively engage the customers and ensure appropriate risk mitigation, is in place.