The State Bank of Vietnam (SBV) will not extend the deadline to put a cap of 22 percent total outstanding loans for non-production loans (securities, property and consumer loans) by the end of June, confirmed the SBV’s Governor Nguyen Van Giau.
Giau said the central bank will have strict penalisation to any banks that do not meet the requirement in time.
The governor said the regulation on reducing non-production credit growth to below 22 percent was issued in early March, so commercial banks have enough time for gradually reduce their non-manufacturing loans by the end of June.
Also according to Giau, so far, there have been 20 commercial joint stock banks whose non-production loans make up over 22 percent of total outstanding loans, of which two banks lenders have non-production loans of 50 percent and 52 percent of the total loans.
One of the problems of commercial banks in the implementation of this provision is that there are currently no clear criteria for distinguishing non-production and production credit. For example, property loans are classified as non-production loans, but in fact, there are many realty loans for production purpose such as constructing infrastructure.
Giau said the central bank will work with the Ministry of Construction on this issue.