The State Bank of Vietnam (SBV) has withdrawn about VND134.5 trillion ($6.46 billion) that was pumped into the banking system for liquidity support via Open Market Operation (OMOs) during the pre-Tet (Lunar New Year) period.
It took out some VND23.356 trillion last week, and some VND111.18 trillion in the 2 previous weeks.
SBV supplied VND160 trillion ($7.64 billion) to ease the liquidity constraints of the local banking system before the Tet holiday.
The central bank last week allocated the credit growth ceilings for 4 groups of banks in 2012, ranging from 0 per cent to 17 per cent.
The maximum credit growth rates of 17 per cent, 15 per cent, and 8 per cent will be applied for to 3 groups of banks, namely healthy, average, and below average, while those in the last group, the weak ones, are not allowed to lend more in 2012, according to the newly-issued Directive 01.
The caps for the four groups of banks will be reviewed after six months for any changes following the situation.
The liquidity of the banking system has been recovered with overnight rates hovering around 9.5 per cent a year, said Saigon Securities Inc in a recent notification to stock investors.
The categorization of local banks can be considered as a basis for the reduction of interest rates, according to Saigon Dau Tu newspaper.
Weak bank list to be confidential
Some tens of local credit institutions are have been classified as weak and disallowed for credit growth this year, said SBV deputy governor Nguyen Dong Tien at a recent meeting.
"The credit institutions listed in group No.4 are struggling with severe lack of liquidity, on the verge of disruption and under restructuring process," said Tien at a press briefing in Hanoi.
However, Tien said the central State Bank of Vietnam would keep secret the identities of the banks belonging to this group, as well as the other groups, secret.
"We will not publicize but send specific notices to each credit institution," he said.
The SBV has already drafted policies to promote the participation of healthy commercial banks in the restructuring process, the Thoi Bao Kinh Te Sai Gon newspaper reported, citing its private source from the central bank.
Not only will state-owned lenders and equities banks at which the state holds controlling shares, but also other healthy credit institutions, will support weak banks during the restructuring process, Thoi Bao Kinh Te Sai Gon newspaper quoted a senior official of the central bank as saying.
Restructuring the banking industry aims to create the impetus and foundation for the development of the banking sector while seeking to minimize financial support from the government budget.