Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh on September 29 attended a Q&A session at the ongoing 31st meeting of the National Assembly Standing Committee, during which he focused on clarifying issues relating to bad debts and credit growth.

In his report delivered at the session, the Governor highlighted a great effort by the Government and the banking system to deal with bad debts.

He said July reported the lowest monthly increase of 0.79 percent in bad debt growth, a remarkable decrease compared to June’s 21.5 percent.

Bad debts had by the end of July totalled at 162.2 trillion VND (7.62 billion USD), accounting for 4.11 percent of the total outstanding debt.

So far this year, about 105 trillion VND (4.935 billion USD) worth of bad debts have been handled.

The Vietnam Assets Management Company (VAMC) proved effective when it had purchased nearly 60 trillion VND worth of bad debts from 35 credit institutions by September 1.

The central bank’s head agreed with several NA deputies’ opinions of handing over more tools in dealing with bad debts to the VAMC. He also proposed raising the company’s chartered capital from 500 billion VND currently to 2 trillion VND.

Regarding credit growth, the governor forecast credit to grow by 10 percent by year-end.

As of September 29, credit growth was estimated at 7 percent against the end of 2013.

The report also revealed that credit institutions have adjusted the interest rate of old loans. By the end of August, outstanding loans in dong with an interest rate of more than 15 percent accounted for 4.3 percent of the total number of loans, while outstanding loans with an interest rate of more than 13 percent accounted for 12.3 percent.

The total means of payment rose by 9.09 percent while deposit growth rate went up by 8.52 percent, with deposit in dong rising 9.94 percent and deposit in foreign currency down by 0.1 percent compared to the same period last year.

The liquidity of credit institutions remained abundant and the interest rate of the inter-bank market was stabilised at a low level, it added.

Addressing the closing session, National Assembly Chairman Nguyen Sinh Hung stressed the need to strengthen monetary policies and economic restructuring so that Vietnam will have a transparent financial system by 2015.-VNA