Business

SBV gives the green light to increase credit

Commercial banks and other credit institutes whose credit growth reached 80% of the targets set by the central bank at the beginning of the year, will have their credit limit increased, stated the State Bank of Vietnam (SBV).

A customer deposits a large amount of cash at a commercial bank in Hanoi. (Photo: VNA)
A customer deposits a large amount of cash at a commercial bank in Hanoi. (Photo: VNA)

Hanoi (VNS/VNA) - Commercial banks and other credit institutes whose credit growth reached 80% of the targets set by the central bank at the beginning of the year, will have their credit limit increased, stated the State Bank of Vietnam (SBV).

The Central bank said in a statement that increasing the limit is part of the SBV’s proactive measures, and commercial banks and other credit institutes need not request it.

Meanwhile, the Central bank advised commercial banks and other credit institutes to comply with its directives and regulations, saying they were designed to enhance business efficiency, ensure system safety and stabilise the monetary market

Credit growth must be carefully planned to ensure safe and sustainable development of the market, to minimise bad debts and to protect the system. Available credit should prioritise production industries, growth-driving pillars and economic sectors of strategic importance. Sectors that were determined as high-risk must be closely monitored.

"In the coming months, the SBV will continue watching domestic and international market developments, be ready to support the market’s liquidity while creating favourable conditions for commercial banks and other credit institutes to increase credit and implement suitable monetary policies," said the SBV.

Le Thu Uyen, a banking analyst at VPBank Securities (VPBankS), said that the Central bank’s policy of increasing credit limits allows banks to compete aggressively for credit room and market share. As a result, interest rates may become more favourable, benefiting borrowers but potentially leading to a slight decrease in banks’ net interest margin.

Commercial banks and other credit institutions that have reached 80% of their allowed credit room since the beginning of the year will have it adjusted, depending on their credit ratings.

Commercial banks, including ACB, HDBank, LPBank and Techcombank, were reported to have reached or were about to fulfil the 80% requirement, and will have their credit room increased from 18% to 18.7%.

As of August 26, the market’s credit growth increased by 6.63% compared to the end of 2023. The Government has set a target of 15%, meaning an additional 8.37%, or the equivalent to over VNĐ1.135 quadrillion can be added until the end of the year./.

VNA
#commercial banks #central bank #State Bank of Vietnam #monetary policies #Vietnam News Agency
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