(Illustrative image: Photo VNA) Hanoi (VNA)- The State Bank has officially adjusted credit limits for commercial banks. This is the information that many people have been waiting for as many banks have run out of credit limits and have tightened their lending activities.
Although the authorities did not provide specific numbers for each bank, the extent of expansion will depend on the current situation of each bank with a range of 0.7%-4. %.
Credit limit extension this time is equivalent to about 457,000 billion VND (around 18.5 billion USD) to be allocated to commercial banks. This capital source is convenient for the implementation of the 2% interest rate support package as well as meeting the capital demand for socio-economic development and business recovery to the end of the year.
Boosting business activities
After 3 months of pausing business activities due to capital shortage, businesses have just over 3 months to fulfill their business targets, therefore, capital resources are significant during this period.
The decision to widen the credit room from the State Bank was well received by many customers. Enterprises expect the increased capital flow will add "oxygen" to businesses in production and business activities.
Leaders of the Vietnam Food Association (VFA) are bullish on the fact that banks allowed to expand credit room means export businesses will be able to continue to borrow capital again.
According to VFA leaders, most rice exporters are small and medium-sized enterprises, so they all borrow capital from banks late in the year to accelerate delivery. This pushes capital demand higher.
Normally, the rice export market will start to buzz in October, because this is the time when businesses need capital to start buying autumn-winter rice. It is their first buying season for 2023.
A representative of a large travel agency in Hanoi said that tourism businesses are eligible for 2% interest rate support, but most of them have not received this support.
“Partly because banks run out of room, besides banks all require new loans to repay old debts to ensure safety and collateral. Along with that, travel businesses mainly rely on human resources, knowledge, brands, etc., which cannot be mortgaged. We hope that with the banks loosening the purse strings, the company may have the opportunity to borrow capital to continue to invest in new products to serve tourists,” the representative emphasized.
Supplement is needed
As of August 26, credit has increased by 9.91% compared to the end of 2021. With the full-year operating target at 14%, it is estimated that an additional VND 457,000 billion of capital will be loaned out.
Some commercial banks said they would focus their capital on priority areas that are recovering from the epidemic.
VIB was officially allowed to expand lending room by 3%. The bank’s leaders said they will continue to focus this additional resource on their strengths, which are consumer loans and small and medium enterprises.
Mr. Nguyen Quoc Hung, General Secretary of the Vietnam Bankers Association also said that in the current context, the State Bank is faced with both stabilizing the system and controlling inflation, so it is under a lot of pressure. Granting credit lines to banks at this time is appropriate to meet the needs of enterprises for loans at the end of the year. Moreover, the allocation of credit lines has been renewed for each bank. The State Bank does not allocate credit growth limits as before, but has clear criteria, which are prioritized for banks on a points system./.
