The State Bank of Vietnam has instructed commercial banks to submitplans by April 21 for holding credit growth this year at less than 20percent.
Credit this year should priotise lending formanufacturing, agricultural production, rural development, small- andmedium-sized enterprises, and support industries and exporters, theState Bank reiterated.
However, many smaller banks have expressedconcern that the credit growth limit of 20 percent might make itdifficult for them to achieve profit targets this year, as domesticbanks rely heavily on revenue from lending.
The problem iscompounded since loan discounts, guarantees, and factoring, as well asthe purchasing of corporate bonds, are all included in a bank’soutstanding loan totals under the Law on Credit Institutions which tookeffect earlier this year.
The State Bank alsodetermined that loan agreements signed in 2010 but disbursed in 2011would be counted in current-year credit growth totals.
Last year,credit growth reached 27.65 percent, overshooting a target of 25percent and pushing outstanding loans to 140 percent of gross domesticproduct (GDP). Credit growth rose in the first quarter of this year byabout 5 percent from the end of 2010.
Banks have also beenordered to reduce the proportion of consumer loans and lending toborrowers in the non-manufacturing sector, including securities and realestate investors, and to report on current outstanding loans on July 12of this year and January 12 of next year.
Commercial banks willbe forced to double their compulsory reserves if they fail to reduce theproportion of outstanding loans to these borrowers by these dates.Pursuant to State Bank Directive No 01/CT-NHNN issued on March 1, theratio of non-manufacturing loans against total outstanding loans mustnot exceed 22 percent by the end of June, and 16 percent by the end ofthe year.
Total loans made for real estate investments last yeartotalled 224 trillion VND (10.67 billion USD), up by 22 percent comparedto 2009, according to Deputy Minister of Construction Nguyen Tran Nam.
Meanwhile,State Bank governor Nguyen Van Giau earlier estimated that tightermonetary policies, targeting growth in the M2 money supply of only 15-16percent this year rather than an earlier estimate of 21-24 percentwould remove an additional 50 trillion VND (2.38 billion USD) fromcirculation and help the Government in its current battle againstinflation./.
Credit this year should priotise lending formanufacturing, agricultural production, rural development, small- andmedium-sized enterprises, and support industries and exporters, theState Bank reiterated.
However, many smaller banks have expressedconcern that the credit growth limit of 20 percent might make itdifficult for them to achieve profit targets this year, as domesticbanks rely heavily on revenue from lending.
The problem iscompounded since loan discounts, guarantees, and factoring, as well asthe purchasing of corporate bonds, are all included in a bank’soutstanding loan totals under the Law on Credit Institutions which tookeffect earlier this year.
The State Bank alsodetermined that loan agreements signed in 2010 but disbursed in 2011would be counted in current-year credit growth totals.
Last year,credit growth reached 27.65 percent, overshooting a target of 25percent and pushing outstanding loans to 140 percent of gross domesticproduct (GDP). Credit growth rose in the first quarter of this year byabout 5 percent from the end of 2010.
Banks have also beenordered to reduce the proportion of consumer loans and lending toborrowers in the non-manufacturing sector, including securities and realestate investors, and to report on current outstanding loans on July 12of this year and January 12 of next year.
Commercial banks willbe forced to double their compulsory reserves if they fail to reduce theproportion of outstanding loans to these borrowers by these dates.Pursuant to State Bank Directive No 01/CT-NHNN issued on March 1, theratio of non-manufacturing loans against total outstanding loans mustnot exceed 22 percent by the end of June, and 16 percent by the end ofthe year.
Total loans made for real estate investments last yeartotalled 224 trillion VND (10.67 billion USD), up by 22 percent comparedto 2009, according to Deputy Minister of Construction Nguyen Tran Nam.
Meanwhile,State Bank governor Nguyen Van Giau earlier estimated that tightermonetary policies, targeting growth in the M2 money supply of only 15-16percent this year rather than an earlier estimate of 21-24 percentwould remove an additional 50 trillion VND (2.38 billion USD) fromcirculation and help the Government in its current battle againstinflation./.
