“Basel is the standard for enhancing capital adequacy for banks, but Basel does not guarantee that banks will not encounter risks. The effectiveness of risk management is achieved when internal bank governance is good, such as increasing capital to meet Basel requirements to enhance safety for depositors, not for additional lending,” said Dr. Dinh The Hien in a talk with The Saigon Times. Transparent but more flexibility neededThe Saigon Times: Regarding the issue of the credit growth target, in 2024, the State Bank of Vietnam (SBV) has introduced a new approach by allocating the entire credit growth target from the beginning of the year, along with openly disclosing the calculation method. How do you evaluate this approach?Dr. Dinh The Hien: Looking at the calculation formula of the SBV, it can be seen that the credit growth quotas in 2024 for commercial banks in the system will depend on two main factors: credit growth in 2023 and the ranking in 2022 according to Circular 52/2018 of the SBV. Therefore, there are two possibilities that need to be considered. Firstly, similar to the annual local budget expenditure plan, if this year’s target is not fully realized, it will be cut in the […]