Vietnam’s banking system now has nine weak credit institutions and they are under the control of the State Bank of Vietnam (SBV), the central bank’s governor, Nguyen Van Binh, revealed at the cabinet press conference on March 6.
“The central bank is now planning to restructure these nine credit institutions. Due to difficulties in finance, these credit institutions have caused interbank bad debts. Therefore, they have to bear higher interest rate of from 18-20 percent per year” the governor said.
According to the governor, these credit institutions had previously accounted for 10 percent of the operations of the entire banking system but after they have been put under the control of the central bank, the rate has decreased to 6 percent. Thus, the effect of these credit institutions to the operation of the whole banking system is negligible.
SBV governor said that credit institutions that borrowed refinance loans in Q4, 2011 to ensure their liquidity have fully repaid currently.
In addition, the central bank will strictly control the weak credit institutions, if a new shareholder wants to participate, the central bank will have to carefully consider whether that shareholders can help the bank develop more or not, he pointed out.