Government to reform central bank’s monetary policy management to raise independence

Government to reform central bank’s monetary policy management to raise independence

The Government mandates increasing the SBV's independence in monetary policy management by gradually shifting to managing based on price and using indirect instruments in the 2026-30 period.

Headquarters of the State Bank of Vietnam. The reform of the SBV's monetary policy management methods is being pursued alongside the modernisation of the banking sector's data infrastructure. — Photo sbv.gov.vn

The Government is set to reform the State Bank of Vietnam (SBV)'s monetary policy management with an aim to enhance the SBV's independence in the 2026-30 period.

Under Decision No. 1809/QĐ-TTg recently issued on modernising the banking system and enhancing access to capital for enterprises, particularly small- and medium-sized enterprises (SMEs), the Government mandates increasing the SBV's independence in monetary policy management by gradually shifting to managing based on price and using indirect instruments.

The reform of the SBV's monetary policy management methods is being pursued alongside the modernisation of the banking sector's data infrastructure.

During the 2026-30 period, the SBV will develop a centralised, modern banking sector database capable of connecting and sharing information with national databases. The data must meet the criteria of being ‘accurate, complete, clean, live, consistent and shareable'.

The SBV’s centralised database will be upgraded based on a big data model, while data collection and cleansing from various points of origin and other sources will be intensified.

The SBV is also tasked with building a centralised data analysis and processing platform for the banking sector to generate analytical and forecasting reports that support direction and management, ultimately aiming to establish a shared data repository for the banking industry.

The goal for 2030 is to transform the SBV into a modern central bank operating on advanced governance and digital data foundations, possessing the capacity for analysis, forecasting, early warning, and timely, data-driven decision-making.

Banking inspection and supervision activities will also be reformed, shifting decisively from compliance-based inspection to risk-based inspection. This involves strengthening off-site supervision and utilising centralised data and artificial intelligence for analysis to support the monitoring of and early warning systems for credit institutions.

For the 2026-30 period, the decision also requires the approval of restructuring plans for credit institutions placed under special control and the continued implementation of restructuring plans already approved by competent authorities. Where necessary, restructuring plans may be reviewed for amendment or supplementation based on proposals from the credit institutions undergoing restructuring.

Under the decision, the SBV is required to enhance the effectiveness of inspection, examination, and supervision regarding the operations of credit institutions, as well as early warning mechanisms; particular attention must be paid to issues concerning ownership, credit extension, loan capital management, and compliance with operational safety regulations, so as to prevent the accumulation of major violations or spillover effects that could compromise system safety.

Regarding business access to capital, the decision sets a target that at least 300,000 SMEs will be able to acquire loans from credit institutions and foreign bank branches by 2030.

Credit institutions are required to develop a diverse range of credit products tailored to the specific types of production or business and to the needs of enterprises; to develop lending models, credit extension methods, and forms of collateral that comply with legal regulations; and to enhance the application of technology and digital transformation in their credit extension activities.

Under the decision, the Government has tasked the Ministry of Finance with building a database of SMEs within the National Enterprise Information System, with completion scheduled for the fourth quarter of 2028.

This database will provide information on business operations, including revenue, profit, actual cash flow, and the fulfillment of obligations regarding taxes, social insurance, employee wages and service bill payments, providing credit institutions with additional data to support their credit extension activities. 

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