Deposits at banks reached a record high of more than VNĐ6.44 quadrillion as of the end of September, representing a rise of 9.95 per cent against the end of 2022. — VNA/VNS Photo Trần Việt

HÀ NỘI — Prime Minister Phạm Minh Chính has asked the State Bank of Việt Nam to ensure sufficient supply of capital for the economy for the rest of this year.

“The State Bank of Việt Nam must ensure credit is pumped into the economy without any delay or congestion,” Chính said in a recent official dispatch about credit growth to the central bank.

Taking lessons from problems in credit growth management in 2022, the State Bank of Việt Nam must comprehensively evaluate credit granting results of the entire economy, as well as of specific sectors and specific institutions, to apply timely measures which are feasible and efficient in ensuring adequate capital for the economy and safety to the banking system.

A report must be submitted to the Prime Minister before December.

Achieving the credit growth target will be a challenge in the context of the low capital absorption rate of businesses and the entire economy.

The central bank’s statistics showed that as of the end of October, the total outstanding loan was estimated at VNĐ12.8 quadrillion, or a growth rate of 7.39 per cent, while the credit growth rate target was set at around 14-15 per cent for the full year.

“At the moment, money flow is still poured into banks because deposits seem to be the safest channel for cash holders,” economic expert Nguyễn Trí Hiếu said.

Despite low deposit rates at below six per cent per year for new sums, deposits at banks reached a record high of more than VNĐ6.44 quadrillion as of the end of September, representing a rise of 9.95 per cent against the end of 2022, increasing for 13 months straight.

Meanwhile, banks were struggling with providing lending for production and business.

According to Director of the Credit Department under the State Bank of Việt Nam, due to impacts of economic slowdown, enterprises’ risk level is higher, making it difficult for credit institutions to increase lending because the credit standard could not be lowered to ensure system safety and prevent bad debt from increasing again.

Many forecasts were that credit growth would reach only 12 per cent this year as lending to the real estate sector, which accounted for 70 per cent of total banking sector lending, was struggling. Besides, production and business were in difficulty, leading to low borrowing demand.

Governor of the State Bank of Việt Nam Nguyễn Thị Hồng said that it was necessary to raise measures to promote domestic demand and expand exports.

Previously, the Government asked the State Bank of Việt Nam to allocate credit growth quotas in July 2023 to serve as foundation for credit institutions to proactively expand credit growth this year.

The focus was on credit for the real estate sector, production and business.

Many banks have recently offered lending packages with preferential rates.

For example, VIB, VPBank, Sacombank, Vietinbank, ACB and SeABank announced credit packages with lending interest rates from around 5 per cent per year for loans to production and business, and housing purchases.  — VNS