SBV continues tightening control over property loans due to credit growth

16-Apr-2021 Intellasia | The Saigon Times | 5:02 AM Print This Post

The central State Bank of Vietnam (SBV) has pledged to tighten control over credit for some risky sectors, including property, it was announced at a teleconference on credit activities held by the central bank on April 14.

As of March, credit had grown by 2.93 percent against the end of 2020 and by 1.3 percent year-on-year. The demand for credit is expected to rise in the coming months, said Nguyen Tuan Anh, head of the Department of Credit Policies for Economic Sectors at SBV.

Between January and February, credit for the agro-forestry-fishery sector and the industry and construction sector amounted to VND777 trillion, up 0.16%, year-on-year, and VND2,615 trillion, up 1.13%, respectively.

As for risky sectors, as of February, loans for the real estate sector had reached 1,835 trillion, up 2.13 percent against 2020, while credit for the securities business dropped by 6.9%.

Apart from the tight control over credit for risky sectors, including property, securities and Build-Transfer transport projects, the central bank also continued to enhance the credit risk management of consumer loans and lending for personal needs to ensure the safety of banking operations, Anh said.

As of March 15, real estate outstanding loans growth at 2.13 percent was higher than the banking sector’s credit growth rate, so the central bank has monitored and issued warnings to credit institutions.

Nguyen Hoang Minh, deputy director of the central bank’s HCM City branch, said that since the beginning of 2021, credit for the property sector in HCM City had risen by 2%, with outstanding loans amounting to VND350 trillion, some 13.5 percent of the total outstanding loans.

Capital flows into the risky sector were controlled, the local media reported, citing Minh.

To enhance control over the risky sectors, risk management of BOT and BT transport projects and consumption, the central bank has adopted certain regulations, including applying the risk coefficient imposed on the real estate sector at 200 percent and on the securities business at 150 percent and revising up the risk coefficient on consumer loans worth VND4 billion or more.

https://english.thesaigontimes.vn/81454/sbv-continues-tightening-control-over-property-loans-due-to-credit-growth.html

 

Category: Finance, Vietnam

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