|Under the decision, the PM required the central bank to provide more supervision to ensure the lending of credit institutions is effective, used for its intended purpose and safe as well as to ensure timely detection and handling of violations by credit institutions. — Photo thitruongtaichinh
HA NOI (VNS) — Prime Minister Nguyen Tan Dung has directed the State Bank of Viet Nam to enhance regular inspections and monitoring for compliance with the regulations on credit extension and using the credit limit.
This move is aimed at better management of non-performing loans (NPLs).
Under the decision, the PM required the central bank to provide more supervision to ensure the lending of credit institutions is effective, used for its intended purpose and safe as well as to ensure timely detection and handling of violations by credit institutions.
The central bank in collaboration with the relevant agencies will appraise the situation and take responsibility before the prime minister for proposals to grant credit that exceeds the limits in some cases.
It must direct credit institutions to strengthen monitoring, surveillance and inspection after lending to enhance credit quality as well as to report the debt collection each month to the central bank for supervision.
According to the central bank, NPLs have dropped from 17.21 per cent in September 2012 to 4.83 per cent by the end of last year. The loans are equal to roughly VND214.9 trillion (US$9.9 billion).
The central bank plans to bring down the NPLs to under 3 per cent by the end of this year.
According to the Ha Noi Statistics Office, the city's credit totalled some VND1,100 trillion ($52.38 billion) in the first half of this year.
The figure, which was recorded this month, rose by 0.3 per cent from last month and was up 9 per cent compared with December last year, meeting more than half of the annual target of 13-15 per cent.
In June, short-term outstanding loans are estimated to rise by 0.2 per cent from May 2015 and 8.7 per cent from December 2014, while medium and long-term outstanding loans are estimated to climb by 0.4 per cent and 9.5 per cent, respectively.
In HCM City, credit in H1 is estimated to rise 5.4 per cent against December last year, the highest growth rate in recent years, according to the central bank's HCM City branch.
However, the NPL ratio was still high, at over 5 per cent of total outstanding loans.
By the end of April 2015, the city's banks had roughly VND53.5 trillion ($2.46 billion) worth of NPLs after selling more than VND2 trillion ($92.16 million) worth of NPLs to Viet Nam Asset Management Company. — VNS