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Thai Binh Banking Industry - A 70-year journey of construction, innovation and development

70 years ago, on May 6, 1951, the President Ho Chi Minh signed Decree No. 15/SL establishing the National Bank of Vietnam, laying the foundation for the formation, construction and development of the Vietnam banking system today.


By September 1951, Thai Binh Provincial Party Committee decided to establish the National Bank of Thai Binh province, on the basis of receiving two organizations "Production Credit Company" and "National Treasury", later changed to National Bank branch in Thai Binh province. On October 26, 1961, the Government Council issued Decree No. 171/CP renaming the National Bank of Vietnam to the State Bank of Vietnam (SBV). During the 70 years of construction and development, going through stages associated with the tasks of each historical period, despite facing a lot of difficulties and challenges, Thai Binh Bank of always stands firm, develops strongly, actively contributes to the general cause of the industry, to the protection, construction and socio-economic development of the province and the country.

In the early days of establishment, the agent of the National Bank of Thai Binh province performed 5 tasks: Managing the issuance of banknotes, organizing the circulation of money; management of the state treasury; mobilize and lend capital for production and circulation of goods; management of currency activities by administrative measures, foreign exchange and foreign currency transactions. The agent's initial facilities were very simple, including only 01 POOCTATIT-branded portable typewriter, a kerosene barrel and a double sawed bamboo tube to hold documents. During the war years, the agent was always one of the targeted points in the fierce destruction from the enemy, the office was relocated continuously year by year, but Thai Binh bank staff always shows the qualities of a revolutionary cadre, who is not afraid of hardships, sacrifices to overcome bombs and bullets, obstructs the way, and controls the enemy to protect money and gold for the State, timely serve the resistance against the French. The 1954 Dien Bien Phu victory of the Vietnamese army and people smashed the efforts of the French colonialists to change the situation of the war, ending the prolonged French colonial rule in the north of our country. Peace was restored, the facilities of Thai Binh Bank were paid more attention to investment, Provincial Bank and District Banks built a centralized working base for accounting and treasury. The equipment included a typewriter, a GAT 63 car and a rabbit motorcycle. The number of staff increased rapidly from 6 people in the initial period of establishment to 1,604 people in 1986, of which 256 people had university degrees and 821 people had high school degrees. Despite being interested in investing and upgrading, Thai Binh Bank's working conditions faced a lot of difficulties. Bank officials ate and lived with the people. On winter nights without blankets, they had to collect straw to make mats, the main means of transportation was bicycle or walking. Overcoming all challenges, Thai Binh Bank's officers and employees always united, strived, and completed all assigned tasks well, with a loyalty to the path chosen by the Party and the President Ho Chi Minh.

Transaction activities at Bank for Agriculture and Rural Development - Quynh Phu branch

The VI Congress in 1986 set a task for the banking industry, that was, "Besides the task of managing money circulation of the State Bank, it is necessary to build a professional banking system for credit business and services. The Bank operates the economic accounting regime”. Implementing Decree 53-HDBT dated March 26, 1988 of the Council of Ministers, the State Bank of Vietnam system was separated into a two-level banking system, including the State Bank performing the state management on banking activities and specialized banks operating under the regime of independent economic accounting and socialist business. In July 1988, the State Bank of Thai Binh province submitted a proposal to the Standing Board of the Provincial Party Committee on transforming Thai Binh Bank into business accounting according to Decree No. 53-HDBT. Accordingly, in Thai Binh province, a branch of the State Bank was established and a specialized bank with a branch of the Bank for Investment and Construction, later the Bank for Investment and Development of Thai Binh province, a branch of the State Bank of Vietnam. Agricultural development later became the Bank for Agriculture and Rural Development of Thai Binh province.

However, after nearly a year of implementing the new organizational model and mechanism under Decree No. 53-HDBT, in addition to the achieved results, it also revealed a lot of limitations in terms of organizational structure, management work, operations, capital management…; Therefore, Thai Binh province continued to pilot the reorganization of specialized bank branches in the province according to Decision No. 120/NH-QD, then operated under the Ordinance on Banking. Over a number of years of implementation, from practice as well as from the requirement to bring banking activities into a higher legal framework, two Ordinances on Banking were summarized, raised to two Laws on Banking approved by the National Assembly and took effect from October 1, 1998. Credit activities were carried out on the basis of commercial principles and basically guarantee the business autonomy and financial self-responsibility of the credit institutions. Many modern market instruments and banking services were put into operation to better meet the economy's demand for capital and banking services. The state management of money was also continuously improved. The management of monetary policy according to the market mechanism under the management of the State was applied more and more effectively. The direct administrative management tools were gradually replaced by indirect management tools such as open market operations, basic interest rates, flexible exchange rate management... Banking Law system was increasingly improved to meet the practical development needs of the increasingly extensive banking industry (Law on State Bank 2010, Law on Credit Institutions 2010, Law on amending and supplementing a number of articles of Law on Credit institutions in 2017).

The 70-year journey of construction and development, through each revolutionary period, under the leadership of the Party, the State's management and administration, the coordination of branches and levels, especially, the companionship with the Communist Party of Vietnam. Enterprises and production households have created favorable conditions for Thai Binh Bank to constantly grow, promote the role of an important economic sector operating effectively, making an important contribution to the development results of the industry, the development of the economy and the local socio-economic development. Up to now, Thai Binh Bank's network of operations includes the State Bank of Vietnam, a provincial branch performing the function of State management of currency and banking activities, and 26 branches of banks and credit institutions, 85 people's credit funds. Credit institutions have established 08 branches at district and city levels, 93 transaction offices, 45 people's credit funds, expanding the area to 64 communes and 260 transaction points of the Bank for Social Policies in communes and wards, towns. With a network of banks covering all provinces, communes, wards and towns, it has created more channels for investment capital for the economy and provided rich and diversified banking services to promptly meet the needs of customers’ transactions of economic sectors.



Trading activities at Quynh Ngoc Commune People's Credit Fund

Not only expanding the operation area, the mobilized capital of Thai Binh Bank system has also grown rapidly over the years. If in 1986, the mobilized capital of the whole industry only reached 238 million VND, reached 431 billion VND in 1996, reached 3,056 billion VND in 2005, it reached 11,678 billion VND in 2010, it reached nearly 33,000 billion VND by 2015, increasing 11 times compared to 2005 and reaching nearly 85,700 billion dong by 2020, increasing 2.6 times compared to 2015; the average growth rate of capital mobilization in the period 2016 - 2020 reached 21.2%/year. In the period of 2016 - 2020, the interest rate level is stable following a downward trend compared to previous years, the deposit interest rate decreased by about 1-1.5%/year compared to the period of 2011 - 2015. Thanks to being initiative in mobilized capital sources, Thai Binh Bank has actively invested in credit capital, helping businesses, individuals and production households to maintain and stabilize production and business, create jobs for employees, make significant contributions to the state budget. If in 1991, the economic investment loan balance of Thai Binh Bank reached VND 158 billion, reached VND 728 billion in 1996, reached VND 3,997 billion in 2005, it reached VND 31,000 billion by 2015, an increase of 7.8 times compared to 2005; the average growth rate of outstanding loans in the period of 1996 - 2005 reached 21.3%/year, in the period of 2006 - 2015 it reached 23.4%/year. In the period of 2016 - 2020, despite facing a lot of difficulties and challenges, the world and domestic economies have many uncertainties due to natural disasters and epidemics, Thai Binh Bank proactively and promptly provided many solutions to solve consistent problems with economic developments, thereby continuing to contribute to the local socio-economic development. In particular, in 2020, due to the impact of the Covid-19 epidemic, the business activities of the nationwide banking system in general and in Thai Binh province in particular faced a lot of difficulties: production and business activities, Consumption has slowed down, customers' demand for loans has decreased, and capital disbursement is low... But by drastic implementation of solutions such as: Launching many large-scale lending programs; using capital for lending to businesses and individuals to maintain and restore production and business, lending to agriculture, rural areas, exports, supporting industries, small and medium-sized enterprises, employing a lot of workers, effective production and business projects, providing loans for poverty alleviation, ensuring social security; reviewing customers, grasping production and business situation, implementing solutions to debt restructuring, interest exemption and reduction, lending for additional capital. Therefore, credit investment of the whole industry has been gradually improved; by the end of 2020, outstanding loans to credit institutions reached VND 65,300 billion, an increase of 2.1 times compared to December 31, 2015, for the period of 2016-2020, reaching 16.1%/year; in which, short-term loans accounted for 71.2%, medium and long-term loans accounted for 28.8%; loans to the fields of agriculture, forestry and fishery accounted for 20%; industry and construction accounted for 32%; trade and service accounted for 48% of total outstanding loans; NPL ratio remained at 0.9%. In the period of 2016 - 2020, the average lending interest rate decreased by 3.6% compared to the period of 2011 - 2015; Maximum lending interest rates for priority sectors decreased by about 2.5% compared to 2016. Many credit programs were actively implemented by the whole industry, such as loans for rural and agricultural development according to Decree No. 55 of the Government reached nearly 24,850 billion VND; loans to 5 priority areas reached VND 5,340 billion, accounting for 8.2% of the total loan balance of the whole area, with 29.3 thousand customers with outstanding loans; loans for fishery development according to Decree No. 67 of the Government with 08 ship owners being able to borrow capital, disbursed amount of 111.4 billion VND, outstanding loans reached 102.4 billion VND; pig raising loans reached 2,470 billion dong; loans to 24 rural clean water business projects, outstanding loans of 181 billion VND… Following the direction of the Government, the State Bank of Vietnam and the province, the provincial branch of the State Bank promptly directed credit institutions in the area to actively implement the measures to prevent and control the Covid-19 epidemic, develop response plans and scenarios, set up hotlines, direct credit institutions to be free for online transactions of public services, free of charge payments to beneficiaries according to Resolution No. 42. In 2020, to help customers overcome difficulties due to the impact of the Covid-19 epidemic, Thai Binh Bank restructured the repayment term and maintaining the same debt group for 370 customers with outstanding loans of VND 271 billion, exempting and reducing loan interest for 1,250 customers with a support interest of VND 530 million, lending new loans to 6,440 customers with a preferential interest rate reduced by 0.5 - 2.5%/year compared to normal interest rate with loan turnover reaching nearly 22 trillion dong.



Enterprises develop production from credit capital 

Along with actively mobilizing capital and lending to the economy, banks always focus on innovating modern banking facilities, services and technology, thereby promptly meeting the increasing needs of customers. The work of ensuring security and safety of the payment system is valued and strengthened; Basic safety risks and risks are controlled and handled in a timely manner. Implement the project of developing non-cash payment for the period of 2016-2020 according to Decision 2545/QD-TTg dated December 30, 2016 of the Prime Minister and Decision No. 637/QD-NHNN dated March 31, 2016 2017 by the State Bank of Vietnam, Thai Binh Bank directed commercial banks to proactively develop plans and promptly and effectively implement solutions to promote non-cash payments in Thai Binh province. Up to now, the whole industry has invested in installing 186 ATMs, 692 POS machines, and issued over 1.2 million payment cards of all kinds to serve the payment and withdrawal needs of officials and people; pay salaries through accounts for 1,800 administrative and non-business agencies and businesses in the area (including 1,452 administrative and non-business agencies), with 174,000 employees receiving salaries through accounts. In the 2016-2020 period, the total revenue of payments through banks reached VND 3,964.3 trillion, the average growth rate reached 23.6%/year, of which non-cash payments accounted for 76% of total sales pay. In addition, Thai Binh Bank always actively arranged and rationalized the amount of cash supplied to circulation, the total cash collection in the period of 2016-2020 reached 1,522.1 trillion VND, the average period reached 304,4 trillion VND/year; Total cash expenditure in the period of 2016-2020 will reach 1,507.9 trillion VND, the average period will reach 301.6 trillion VND/year to promptly meet the cash needs of financial institutions and people, serving production, trading and transporting goods.

The work of inspection, examination and supervision to ensure safety in the operation of credit institutions has been strengthened and the quality of operation improved. Implementing the project on restructuring credit institutions and the project on handling bad debts of the banking sector, the provincial branch of the State Bank strengthens the direction of credit institutions to implement the restructuring scheme in accordance with the direction of the central bank and the province; direct credit institutions to synchronously deploy solutions to speed up the bad debt settlement progress; closely monitor, examine and supervise the implementation of the restructuring plan associated with treatment of bad debts. Up to now, in Thai Binh province, 83/85 people's credit funds have reached the minimum capital adequacy ratio as prescribed. Managment and administration at the People's Credit Funds are basically maintained in order; Internal control, audit, and organizational consolidation have been enhanced to meet the requirements of Circular No. 04/2015/TT-NHNN, Circular No. 21/2019/TT-NHNN regulating personal credit funds. people; Credit institutions have developed strategic business orientations, increased the application of information technology and modernized banking technology in their operations....

The management of gold and foreign exchange business activities in the period of 2016-2020 is basically stable, the legal foreign currency needs of organizations and individuals are fully and promptly met, and the scope of free market is narrowed, confidence in the Vietnamese dong was enhanced; The gold market managed by Decree No. 24/2012/ND-CP and Circular 16/2012/TT-NHNN dated May 25, 2012 of the State Bank of Vietnam continued to be stable and self-regulating. At the time when the world gold price fluctuated strongly and unpredictably, the market did not have a "gold rush", the sales of gold bars were low. Administrative reform has received attention, directed and implemented drastically, achieved positive results in all aspects, created a favorable and open environment in the banking sector, and improved the credit access index, enhance convenience for people and businesses in credit relations and monetary services, payment.



State Bank of Vietnam - Provincial branch received the flag for excellent unit in the emulation movement of the Government.

In addition to the effective implementation of professional and professional work, Thai Binh Banking industry is also very active in the implementation of social security work in the province, in the period of 2016-2020, the banking industry has support nearly 200 billion VND to build schools, cultural houses, kindergartens, purchase medical equipment, support to build houses for poor households... making a significant contribution to poverty reduction, hunger eradication and poverty reduction, improve the material and spiritual life of the people.

With the achievements achieved in the past 70 years, Thai Binh Bank was honored with many noble titles by the Party, State, banking industry and Thai Binh province, especially the State Bank of Thailand Branch, received the First Class Labor Medal in 2015 and many emulation flags from the Government, the Provincial People's Committee, the Governor of the State Bank and the Certificate of Merit, Certificate of Merit, other noble awards of all levels and branches.

Entering 2021, Thai Binh Bank is trying to emulate achievements to successfully celebrate the 13th National Congress of the Party, develop action programs and plans for the successful implementation of the Great Resolution. The 13th National Party Congress, the 20th Thai Binh Provincial Party Congress, the task of socio-economic development of Thai Binh province, the development of the banking industry in the period of 2021-2025, with specific objectives and tasks: mobilized capital increased by an average of 18 - 20%/year, credit balance increased by an average of 13-15%/year, bad debt ratio <3%, growth in payment sales through the banking system 20-22% per year on average, of which non-cash payments by the end of 2025 account for 85% of total payment revenue. To achieve that goal, in the coming time, the banking sector will focus on effectively implementing monetary policy and banking activities, promoting capital mobilization, investment and lending for socio-economic development at localities, actively implementing credit programs under the direction of the State Bank of Vietnam and the province, focusing credit on production and business fields, priority areas, synchronously deploying solutions to solve problems, difficulties for customers affected by natural disasters and epidemics, ensuring the realization of the dual goals of promoting socio-economic development and epidemic prevention; strengthen the effectiveness and efficiency of the banking inspection and supervision system, rectify and strengthen the operation of the PCF system, handle weak PCFs and strengthen the management and supervision of microfinance institutions, continue drastic and effective implementation of the Scheme on restructuring the system of credit institutions associated with bad debt settlement in the new period in order to achieve the objectives of the Banking Development Strategy, especially, to increase investment, equipping facilities, develop modern banking products and services, actively coordinate in providing non-cash payment services and electronic payment applications to serve the provision of public services such as paying pensions, social insurance benefits, electricity bills, tuition fees, hospital fees...; continue to promote administrative reform, simplify procedures, create favorable conditions for customers, contribute to improving the reputation and image of the bank in the locality, contributing to local socio-economic development.

Upholding the good tradition of 70 years of construction and development, all officers, civil servants, public servants and employees of Thai Binh Bank continue to promote pride, solidarity and sense of responsibility with the branch, inheriting the glorious tradition of the previous generations, overcomes all difficulties, actively emulates and successfully completes the assigned tasks, sets up achievements to successfully celebrate the 13th National Congress of Delegates of the Party and celebrate the 70th anniversary of the establishment of Vietnam's banking industry./.

Author: Phan Thi Tuyet Trinh - Director of the State Bank of Vietnam - branch of Thai Binh prrovince
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