Banks say businesses unfaithful, businesses complain banks play unfairly

Banks say businesses unfaithful, businesses complain banks play unfairly

The fact that one business borrows money from many different banks has been cited as the main reason behind the difficulties in reckoning bad debts. Meanwhile, businesses said they many times tasted bitterness when banks made a U-turn.

While the Governor of the State Bank of Vietnam affirmed at the dialogue between businesses and commercial banks held late last week that most of the banks have slashed the lending interest rates to 15 percent, businesses replied that none of them could access bank loans at the interest rate.

Tran Anh Vuong, Chair of Bac Viet Steel Corporation, Deputy Chair of the Hanoi Young Entrepreneurs’ Association, said the majority of the association’s members have not received any information from banks about the application of the new interest rate of 15 percent for old loans.

Meanwhile, Nguyen Thu Ha, General Director of Lexim, which specializes in machines and construction equipment, complained that though her company has never been late in paying bank debts, she still cannot borrow money from a VietinBank’s branch in Hanoi, though she applied for the loan 1.5 months ago already.

Do Ha Nam, President of Intimex, shared the same view with Ha that commercial banks are as changeable as the weather. Nam said that a farm produce product got the nod from a bank to provide loans after a decision of the Prime Minister. However, the bank finally changed its decision, refusing to disburse money.

“We have been advised to deal with a single bank. However, we are afraid that one day, the single bank would refuse to provide loans to us. If so, all our production activities would come to a standstill,” he said, adding that it would be better for them to deal with more than one bank.

However, the fact that one business keeps relations with more than one bank has caused a lot of big problems. One of the problems is the inability to calculate the bad debts of the banking system accurately. It happened in the past that only when a business went bankrupted, did the banks, which were the creditors, found out that the business borrowed money from many banks because it could not pay bank debts.

Nguyen Huu Nghia, acting Chief Inspector of the State Bank of Vietnam, also said that the bad debts the inspectors have discovered are much higher than the figures reported by commercial banks, partially because businesses keep credit relations with many different banks. Meanwhile, banks still lack the information about the client classification.

In the latest news, the bad debts belonging to the 5th group (irrecoverable debts), have been reportedly increasing rapidly in the first six months of the year.

On July 12, the State Bank released a report showing that by May 31, 2012, the credit institutions had reported the bad debts at 117 trillion dong, accounting for 4.47 percent of the total outstanding loans.

Meanwhile, the inspectors of the State Bank have found out that by March 31, 2012, the bad debts had reached 202 trillion dong, amounting to 8.6 percent of total outstanding loans.

The finance reports of six listed banks including Vietcombank, Vietinbank, ACB, MB, Eximbank and Navibank showed that by June 30, the total outstanding loans of the six banks had reached 753,725 billion dong, while the bad debt 18,942 billion dong, or 2.51 percent of the outstanding loans.

Of the six banks, Navibank has the highest bad debt ratio at 3.86 percent. Vietcombank’s ratio is 3.47 percent, Vietinbank 2.45 percent, MB 1.82 percent, Eximbank 1.73 percent and ACB 1.53 percent.

vietnamnet