Five Banks to Cap Credit Growth at 25 per cent in Remaining Months: SBV
The State Bank of Vietnam, the country’s central bank, has requested five state-run banks cap their credit growth at 25 per cent in an effort to curb the economy’s credit growth at below 25 per cent-27 per cent to tame inflation at single digits this year.
The SBV had the move after the credit growth accelerated at a pace of 22 per cent between January and July, particularly a rise of 5 per cent in July.
The five banks are state-owned Bank for Investment and Development of Vietnam (BIDV) and Vietnam Bank for Agriculture and Rural Development, Mekong Housing Bank, the Vietcombank and Vietinbank, which will account for a combined 70 per cent of the domestic credit market.
“By limiting the five banks’ credit growth can the SBV curb the country’s credit growth at the set 25 per cent-27 per cent targets,” Duong Thu Huong general secretary of the Vietnam Banking Association said in a note.
“The SBV has requested local lenders to extend loans more cautiously,” Vo Thi Sanh deputy head of BIDV was quoted as saying.
The SBV governor has recently asked local joint stock banks to report their credit growth plans, Huong noted.
HSBC economist Prakriti Sofat said the SBV has forecast rising credit growth as signals of key inflation risks.
Between early February and now, banks and local financial companies have made soft loans of VND392.609 trillion (US$22.041 billion) under the government’s subsidized lending program. (VIR, SBV)
Vietnamese
