SBV tightens credit for savings books
The State Bank of Vietnam (SBV) has warned local banks not to let clients use books of savings as collateral to take out loans, pointing out that this process is illegal if these borrowers have no plans to use the capital.
According to the local media, the central bank issued the warning after acknowledging that several banks have offered loans to customers using books of savings as collateral. However, these customers do not present capital use schemes, as required in the SBV’s Circular 39/2016/TT.
Therefore, the lending process violates the central bank’s rules on using non-cash means of payment for loan disbursement, the bank stated.
To stabilize the monetary market and ensure the secure operations of the banking system, SBV has asked credit institutions to shun unhealthy competition and follow regulations on lending and interest rate and the use of non-cash means of payment for loan disbursement.
Besides this, banks are required to strictly oversee capital use purposes and the disbursement of credit for books of savings. The central bank will take strict action against credit institutions caught breaking the rule, according to the notice.
In addition, SBV asked credit institutions to strengthen supervision and control over the application of deposit and lending regulations to identify credit offered where books of savings are used as collateral.