A branch of Vietcombank in Lào Cai Province. Banks with high outstanding loans can proactively increase their credit growth quota based on their rankings. — VNA/VNS Photo Quốc Khánh

HÀ NỘI — Banks whose outstanding loans have so far reached 80 per cent of the credit growth quota allocated by the State Bank of Việt Nam (SBV), will be automatically allowed to expand credit room based on their ranking, the SBV announced on Wednesday.

That means banks with high outstanding loans can proactively increase their credit growth quota without having to send proposals and get approvals from the central bank. The central bank said it is moving towards gradually abolishing the credit growth quota regime following the National Assembly and the Government’s guidance.

The SBV also asked commercial banks to strictly implement regulations on monetary operation and credit granting to ensure system safety and support economic growth.

The credit flow must be directed to production and business, especially prioritised sectors and growth drivers, together with strict control over risky sectors.

The central bank also asked for efforts to be enhanced to stabilise interest rates, reduce operation costs and simplify lending procedures.

As of August 26, the overall credit growth is at 6.63 per cent against the end of 2023, much lower than the growth target set at 15 per cent for the full year, the central bank said.

Sixteen banks had credit growth rates higher than the system’s average, among which five had credit growth rates of more than 12 per cent including HDBank, ACB, Techcombank, LPBank and NCB.

According to the Việt Nam Banking Association, credit is being expanded at a slower-than-expected rate as production and business remain in difficulty and the real estate market has not recovered fully.

The pressure is huge in the remaining months of this year as a large amount of lending estimated at more than VNĐ1 quadrillion must be pumped into the economy to meet the credit growth target, while risks must be under control.

VPBank Securities said that the credit growth target at 14-15 per cent this year is challenging but within reach, on the back of expectations that consumption will recover and production and business growth will continue in the second half of this year, along with the Fed cutting rates. — VNS