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SBV takes strict control in real estate, securities lending

The State Bank of Viet Nam (SBV) will conduct surprise inspections of credit institutions whose loans in some potentially risky sectors are high and account for a large proportion of the institutions’ total outstanding loans.

 


Under a recent SBV directive to implement key tasks of the banking industry in the second half of this year, SBV said that its inspection and supervision would focus on 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.

Besides requiring credit institutions to control their lending according to credit growth limits set by SBV, the central bank also asked them to tighten lending and improve quality of loans in the risky sectors.

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

According to Nguyen Quoc Hung, director of the SBV’s Credit Department, the growth rate would aid macroeconomic stability while still ensuring inflation and foreign exchange rate control.

Banking expert Nguyen Tri Hieu also believed that the credit slowdown would allow banks to pay more attention to credit quality and credit risk management.

Besides, Hieu said, the slowdown could be an advantage as banks could cut their lending interest rate thanks to good liquidity as capital mobilisation is higher than lending.

It was estimated that credit growth of all credit institutions by the end of July was around 8 per cent, so that it won’t be hard to meet the 17 per cent credit growth target in 2018 as lending often surges sharply in the third and fourth quarters.

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SBV takes strict control in real estate, securities lending

The State Bank of Viet Nam (SBV) will conduct surprise inspections of credit institutions whose loans in some potentially risky sectors are high and account for a large proportion of the institutions’ total outstanding loans.

 


Under a recent SBV directive to implement key tasks of the banking industry in the second half of this year, SBV said that its inspection and supervision would focus on 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.

Besides requiring credit institutions to control their lending according to credit growth limits set by SBV, the central bank also asked them to tighten lending and improve quality of loans in the risky sectors.

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

According to Nguyen Quoc Hung, director of the SBV’s Credit Department, the growth rate would aid macroeconomic stability while still ensuring inflation and foreign exchange rate control.

Banking expert Nguyen Tri Hieu also believed that the credit slowdown would allow banks to pay more attention to credit quality and credit risk management.

Besides, Hieu said, the slowdown could be an advantage as banks could cut their lending interest rate thanks to good liquidity as capital mobilisation is higher than lending.

It was estimated that credit growth of all credit institutions by the end of July was around 8 per cent, so that it won’t be hard to meet the 17 per cent credit growth target in 2018 as lending often surges sharply in the third and fourth quarters.

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