Vietnam News Network

Vietnam News: Local, National, Business, Sport, Entertainment and Technology

Trade XRPUSD, Bitcoin and Cryptocurrencies

BUY & SELL XRPUSD | View XRPUSD News & Updates


Buy Sell XRPUSD, Bitcoin and Cryptocurrencies

Banking experts suggest technical barrier to curb credit growth rate   2009-07-20 - DTCK

Banking experts have said that the central bank should not set credit growth rate limits for every commercial bank, while it should set up a technical barrier to curb credit growth.

 

 
Some joint-stock banks have announced they fulfilled 80 percent of their yearly credit growth plans in the first six months of the year. DongA Bank had fulfilled its yearly credit growth plan by late May 2009. Meanwhile, the credit growth of the whole banking system has used 2/3 of the year’s ‘quota’.

 

Credit growth still controllable

 

Analysts made a guess that after the meeting of the State Bank of Vietnam and representatives from credit institutions which had outstanding loans growing by over 20 percent in the first six months of the year, the central bank would take more drastic measures to curb credit growth. However, things have not entirely gone this way.

 

To date, the State Bank of Vietnam has just reminded banks to keep control over credit growth, while it has not set rigid requirements on the commercial banks which had overly high credit growth rates in the first six months of the year.

 

Duong Thu Huong, Secretary General of the Vietnam Banking Association, believes that the credit growth in the period should not be seen as the main reason that made inflation increase.

 

According to Huong, if the credit grows by 30 percent this year as planned, this will not be a ‘hot credit growth rate’.

 

The director of a department under the State Bank of Vietnam also said that the increased volume of cash in circulation originates from many factors, while credit is just one of the factors. Currently, the State bank is still keeping strict control over cash volume and credit growth

 

Technical barriers should be installed

 

It will not be an easy task to curb the inflation rate at below 30 percent in 2009, while the ‘room’ for credit growth rate is just 10 percent for the period from now to the end of the year.

 

According to experts, it is unreasonable to release a document setting the credit growth limits for every bank. It is more important to install technical barriers to tighten credit.

 

High credit growth rates always occur with newly-established commercial banks that are trying to expand their networks. As the banks still have difficulties in corporate governance, human resources and experience, the higher credit growth rate the banks get, the more risks they face.

 

The State Bank has announced the Governor’s instruction that commercial banks have to restructure credit investment to focus on lending to production and export and to reduce loans to non-production fields, including securities, real estate and consumption, which have been increasing rapidly, thus forcing the consumer price index up.

 

State-owned banks, Vietcombank and Vietinbank, have to curb credit growth at no more than 25 percent this year. Other joint-stock banks have been told to draw up credit growth plans for the last six months of the year and submit them to the central bank by July 20.



Other news

BUSINESS IN BRIEF 20/7   2009-07-20

‘Black dollar’ market still attracting customers   2009-07-20

VNR500 Summit 2009: Seizing opportunities to improve competitiveness   2009-07-20

Lacking dollars, ingot steel producers entreating Government for help   2009-07-20

Banking experts suggest technical barrier to curb credit growth rate   2009-07-20

Most EU states want to terminate Vietnam shoe duties   2009-07-20

M&A to remain bustling business in Vietnam   2009-07-20

M&A to remain bustling business in Vietnam   2009-07-20

Insurance industry weathers crisis   2009-07-20

Insurance industry weathers crisis   2009-07-20

Vietnam steel makers raise prices again, citing higher costs   2009-07-20

Personal advice valued the most, consumer survey finds   2009-07-20

Stocks may climb by year-end, Vietnam Lotus Fund says   2009-07-20

Securities and property backed loans surge strongly   2009-07-20