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Banks won’t get higher credit limits

Update: August, 09/2018 - 20:50
Commercial banks will not be allowed to get higher credit limits in H2 2018. - VNA/VNS Photo
Viet Nam News

HÀ NỘI — The State Bank of Việt Nam (SBV) will not adjust upward credit growth limits for commercial banks, except in some special cases, for the rest of the year, SBV Governor Lê Minh Hưng said.

The special cases are banks that have been required by the SBV to support ailing credit institutions in their restructuring in 2018, Hưng said.

According to current regulations, SBV sets a credit growth limit for each commercial bank depending on the bank’s health at the beginning of the year. This is done to control credit growth for the entire banking system and to support Government targets.

Earlier, many banks said they were hoping for higher credit limits as they had already used up most, if not all, of their assigned quota for the year.

The central bank’s target this year was to expand lending by a maximum of 17 per cent, lower than the 18.17 per cent recorded last year.

Experts believed that the credit slowdown would allow banks to pay more attention to credit quality and credit risk management.

To control the credit quality, SBV also required banks to focus their lending on production, business and priority sectors such as agriculture businesses, firms producing goods for export, small- and medium-sized enterprises, enterprises operating in auxiliary industries and hi-tech enterprises including startups.

They must strictly control lending to sectors with high potential risks such as real estate, securities, consumption, build-operate-transfer (BOT) and build-transfer (BT) projects to promptly detect any problems. — VNS

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