A forum is held in Hanoi on May 8 to discuss the 2018 banking industry towards sustained growth. (Photo: Nhan Dan)

Hanoi (VNA) – The banking industry has been radically restructuring credit institutions in combination with handling bad debts to ensure their safe, healthy and sustainable growth, said a central bank senior official.

Deputy Governor of State Bank of Vietnam (SBV) Nguyen Kim Anh made the statement at a forum on the 2018 banking industry towards sustained growth held in Hanoi on May 8.

According to Anh, the restructuring of credit institutions has so far been positive with the non-performing loan ratio of the entire banking system being kept at below 3 percent.

To ensure the sustained growth of the banking industry, the central bank will soon finalise the appraisal and approval of credit institutions’ restructuring plans besides closely supervising their operation, especially ailing ones, to timely take actions.

The SBV has so far approved the restructuring plans of most banks. However, the restructuring plans of financial companies and financial leasing companies are still being prepared.

As for State-owned commercial banks, the restructuring will focus on enhancing the banks’ financial status after their restructuring plans are approved by the Prime Minister, Anh said, adding that according to a decision issued last year the on restructuring credit institutions in combination with non-performing loan settlement for 2016-20, State-owned banks must improve their charter capital to meet Basel standards.

The SBV’s Deputy Chief Inspector Pham Huyen Anh said the central bank will also resolutely deal with the cross ownership and violation of the limit regulation on ownership of shares at banks to avoid group interests, which could cause damage to the entire banking system.

Solutions on trading NPLs according to the market mechanism will also be implemented together with measures to control risks of the trading method, he noted.

At the forum experts praised the SBV’s handling of monetary management policy in recent years, noting it has helped stabilise the macroeconomy, support economic growth, and create confidence among investors.

The SBV has taken rational steps to manage monetary policies, said Vice Chairman of the National Assembly’s Economic Committee Nguyen Duc Kien.

Credit growth target was always included in the Government’s annual report to the National Assembly as a mandatory goal that required the SBV to pump money to achieve it if necessary, Kien said. It is now just an indicator for reference, he added.

Echoing Kien’s view, Pham Thanh Ha, Director of the SBV’s Monetary Policy Department said the SBV has shifted its focus on ultimate goals to maintain a stable money value, control inflation and support economic growth.

Nguyen Xuan Thanh, Director of Fulbright University Vietnam, said the monetary management policy is operating so well that the central bank should not loosen it.

The SBV had to do so a year ago to support economic growth, which reached only over five percent in the first quarter of 2017, Thanh noted, adding that the country’s GDP growth last year was supported significantly by the monetary policy.-VNA