Source : Vietnam Banking Finance News
VietFinanceNews.com - The State Bank of Vietnam has instructed banks to keep a closer eye on their lending to ensure credit growth does not exceed 20 percent this year as envisaged by the government in its Resolution 11.
It wants them to set specific targets for every quarter and advise branches and transaction offices of the targets besides informing its Monetary Policy Department before April 22.
It ordered local lenders to reduce credit for non-production purposes like real estate, stocks, and consumption to 22 percent or less by June 30 and 16 percent by year-end, and threatened to double reserve requirements for failure to do so.
They have to report on their non-production loans every month to the central bank by the 12th of the following month, it said.
In case of failure to report for June and December by that deadline, it said it will use the earlier available figures to set reserve ratios.
Though many banks have stopped lending for non-production purposes and limited lending for consumption, some are struggling to recover earlier loans and bring down the growth rate.
The chairman of a commercial bank, who wished to remain unnamed, told Tuoi Tre that his bank’s outstanding non-production loans are 30 percent of the total. But with the realty market in the doldrums, it is unable to bring down the figure by recovering the loans.
The general director of another bank echoed this saying it is uncertain if loans to realty can be recovered any time soon.
Loans outstanding at all banks at the end of the first quarter was VND110 trillion, up 4.81 percent year on year.