Tuesday, November 21 2017

VietNamNews

State Audit reports on SBV performance in 2011

Update: May, 23/2013 - 08:21
The State Audit said the central bank management must be held responsible for lending growth failing to reach its target and bad debts continuing to rise since 2007.— VNS File photo
HA NOI (VNS)— The State Bank of Viet Nam has adhered to the Government's instructions in 2011 to implementing a tight monetary policy, adjusting interest rates in line with market signals and keeping exchange rates stable.

This was according to the online newspaper VnEconomy which quoted the State Audit's report on the State Bank's performance in 2011.

However, the State Audit said the central bank management must be held responsible for lending growth failing to reach its target and bad debts continuing to rise since 2007.

The State Bank's inspection and supervision on refinance loans was also referred to as "untimely" or "incomplete".

The State Audit said that some commercial banks borrowing refinancing loans had violated regulations on capital adequacy but the central bank did not warn, prevent and handle the matter quickly enough. For example, the Northern Asia Bank, Trust Bank violated the ratio in the first nine months of 2011, but the State Bank only started supervising their activities in late November.

The State Bank's management on the interbank market also was "limited", and it could not control unusually high interbank rates. The State Audit commented on an incident in February 2011 when the interbank rate surged to 30 per cent a year, and up to 37.5 per cent in November against deposit rate cap of only 14 per cent at that time.

As for commercial banks, the State Audit said most had followed legal regulations on lending and credit growth. However, some banks had gathered and finished legal and economic documents before lending was incomplete. Control before, during and after lending was not strict.

In cases where banks classified loans inappropriately, the State Audit asked the Bank for Investment and Development of Viet Nam (BIDV) and the Mekong Housing Bank (MHB) to make the necessary adjustments.

Some lenders had high overdue debts on the interbank market. For example, MHB's outstanding deposits at the end of 2011 at other credit institutions was VND11.73 trillion (US$558.94 million), of which overdue deposits that must be renewed reached VND1.15 trillion ($55.1 million) and more than $4 million in total.

The State Audit said trading in the forex market of some commercial banks had not followed the rules while some had violated interest rate cap regulations. — VNS



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