Property sector calls for adjustments to bank loan regulations hinh anh 1Illustrative photo (Source:

HCM City (VNA) - The new restriction on banks of using only 40 percent of their short-term deposits for long and medium-term loans should not take effect next year, the Ho Chi Minh City Real Estate Association (HoREA) has said.

In a document to the Government and the State Bank of Vietnam (SBV), HoREA said it is not necessary, it is not practical and does not meet the requirements of developing the real-estate market. The rate should remain at 45 percent, it suggested.

HoREA mentioned in its documents circulars issued by the SBV, including circular 36/2014/TT-NHNN, 19/2017/TT-NHNN, in which the maximum level that banks can use to give long and mid-term loan was 60 percent in 2016 and 50 percent in 2017. It will then drop to 40 percent by January 2019.

The association said the law requires property developers to have own capital of 15-20 percent of the project cost and can borrow the rest.

But banks are unable to meet that demand since short-term deposits account for a large proportion of their total deposits, the association said.

The second reason the association wanted the new regulation to be delayed was the sharp decline in the property market in the first nine months of the year as credit to the sector fell to the lowest level in three years.

But next year the market would rebound, driven by the mid-priced segment, the association said.

The industrial property market would also grow strongly since many foreign investors are choosing Vietnam to move into, it said.

This would also boost the office and hired apartment segments, it added.-VNA