The State Bank of Vietnam (SBV) has instructed its municipal and provincial branches nationwide to closely monitor and inspect consumer loans given by commercial banks.

The move is expected to ensure consumer-lending operations comply with applicable regulations and protect the rights of borrowers.

Accordingly, branches, transaction offices and the service introduction points of credit institutions must publish detailed interest rate information applicable to each product group and each loan product.

Additionally, the SBV branches, in collaboration with the banking supervisory agency, must strictly handle violations detected through inspecting and monitoring the activities of credit institutions in the respective areas.

The move was made after experts recently said that some banks had loosened their lending conditions for consumer loans to boost lending since deposits continue to rise amid slow credit growth. Some even offered consumer loans without mortgages or collateral.

According to the SBV, total deposits rose 9.48 percent in the first seven months of the year, while lending increased only 4.91 percent.

Additionally, the credit growth target of 12 percent set by the central bank for 2013 has also made many banks seek ways to loosen their lending conditions. Previously, banks applied strict requirements to their lending conditions for consumer loans in order to limit risks and avoid bad debts.

Bad debts were on the rise, experts said, warning that if banks try to achieve credit growth at any cost, it would create bad consequences for the entire banking system, as well as the economy.-VNA