There are presently about ten weak commercial banks in the system, yet the State Bank of Vietnam (SBV) will not disclose the list of weak credit institutions.
There are presently about ten weak commercial banks in the system, yet the State Bank of Vietnam (SBV) will not disclose the list of weak credit institutions, the local online newspaper Tri Thuc Tre (TTVN) quoted Nguyen Dong Tien, deputy Governor of the SBV as saying at a conference yesterday [February 14].
This year, the central bank will unprecedentedly classify local credit institutions into four categories to assign credit growth limits. Specifically, the central bank set maximum credit growth rate at 15 percent for Group 1 (healthy banks), 15 percent for Group 2 (moderately healthy banks), 8 percent for Group 3 (unhealthy banks) and 0 percent for Group 4 (weak banks).
Weak credit institutions [Group 4] will have to restructure loans, collect debts and improve their health. Six months later, the SBV will consider adjusting credit growth targets for credit institutions with more stable and healthier operation.
Foreign financial and credit institutions which have just raised their charter capital can provide loans up to their charter capital.
Outstanding loans for non-production purposes accounted for 13 percent total loans of the entire banking system at the end of 2011, yet there were several institutions with non-production loan ratio above 16 percent. In the coming time, the SBV will have measures to warn and deal with violating banks. Currently, lending to the real estate sector stood below 9 percent, Tien said, adding that the SBV will ask credit institutions to review loans provided for several real estate investors in default lately.
Besides, the central bank requested domestic credit institutions to control their proportion of lending to non-prioritised sectors to total loans at maximum 16 percent this year.
The central bank is developing a plan to mobilise resources from the economy, including gold.