Banks want loosening of policy to offer more loans

Read the original news 

VietnamNet English - 41 month(s) ago 1 readings

Many commercial banks are demanding the Central Bank set different credit growth caps for different banks, as some of the bigger ones are able to offer more loans to the production sector without passing the credit growth ceiling of 20 percent while smaller banks have already surpassed the target.

Pham Huy Hung, chairman of the Vietnam Commercial Bank for Industry and Trade (Vietinbank), said he is asking the prime minister and the State Bank of Vietnam for permission to increase this year’s outstanding loan limit to 30 percent, adding this would be given to key projects in the manufacturing sector.

Hung said the credit growth of his bank in the first half of this year just reached 9 percent.

Most of the money was given to the fields of telecommunication, coal, electricity, exports and agricultural production with low lending interest rates of 19 to 20 percent a year, he said.

He suggested that the government should not limit the credit growth for all commercial banks, but set a 20 percent ceiling for the credit growth of the whole economy.

The government should consider the condition of each bank to decide whether to allow them to raise their outstanding loans, he said.

The CEO of a major commercial bank said flexibility in the credit growth target would greatly affect the economic development, especially when the inflation target was increased to 15 percent for this year.

Trinh Van Tuan, CEO of Phuong Dong Bank, said his bank would offer more loans to the production sector as the credit growth in the first five months of the year had just increased by 5 percent.

The interest rate of Phuong Dong Bank had also gone down to 20 percent a year, he added.

Central bank keeps the deposit interest rate ceiling

In a meeting with the Ho Chi Minh City-based commercial banks held last week, the State Bank of Vietnam Governor Nguyen Van Giau also confirmed there would be no change in the deposit rate ceiling of 14 percent a year.

Dr. Le Tham Duong, head of the business administration of the Ho Chi Minh City Banking University, said the central bank had made the right move by keeping the deposit cap.

In the current context, when the consumer price index tended to decrease and the interbank interest rate was around 15 percent, the banks are forced to reduce their deposit interest rate, he said.

Otherwise, if the ceiling is removed, some banks will hike the interest rate and also boost the deposit interest rate.

An economic expert said the cap helped achieving both targets of curbing inflation and supporting growth.

But the interest rate should be gradually reduced, as the too low rate would encourage customers and firms to borrow more loans, and thus boosting the credit growth, he said.

Source: Tuoi Tre

There is no comment

Please Sign up or Login to comment.

Top page