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SBV: Loaning VND at US$ loan interest rates impossible
Governor of the State Bank of Vietnam Nguyen Van Giau yesterday affirmed that banks would not loan VND to export companies at the interest rates applied for US$ loans as requested by the Ministry of Industry and Trade (MOIT).
MOIT, to help ease the burdens on export companies, asked the State Bank of Vietnam to instruct commercial banks to provide VND loans to export companies at US$ loan interest rates.
The proposal was made after a lot of export companies were weeded from the list of subjects eligible for US$ loans. Under the newly promulgated document, businesses can only get US$ loans if they are 1/ import companies that need US$ to import commodities and services 2/ companies that need US$ to pay matured debts 3/ foreign invested enterprises.
Giau on June 18 told the press that he had a working session with Minister of Industry and Trade Vu Huy Hoang in which he clearly expressed the viewpoint of the State Bank of Vietnam that loaning VND at US$ loan interest rates was impossible.
Under the previously applied mechanism, export companies also had the right to borrow in US$, but they then sold the dollars to banks to get VND.
Many businesses, especially private ones, have suggested resuming the mechanism which helps them get margin profit. However, the State Bank will not allow that as it would upset the market.
When asked if the State Bank of Vietnam knows about commercial banks dodging the laws to sell dollars to businesses at prices higher than the posted levels, Giau said that the State Bank will strictly punish the credit institutions that violate the law.
He said that he has asked the HCM City Branch of the State Bank of Vietnam to inspect bank branches in HCM City, which have been reportedly dodging the law to indirectly raise lending interest rates.
Regarding the concept of ‘strictly punish’, Giau said that he will ask to dismiss the leaders of violating agencies and banks, as the fine of several millions of VND would not help prevent them from continuing to violate the laws.
However, Giau said he has heard that violations have stopped.
VNN
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