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Banks asked to tighten control over consumer lending
The State Bank of Vietnam said Friday it has asked commercial lenders to inspect their subsidiaries and ensure safety in consumer lending.
The central bank has also asked heads of commercial banks to take “strict measures” against their staff who have broken banking regulations in consumer lending, it said in its weekly monetary report.
Commercial banks have to report their inspection results before July 15, the report said.
Outstanding consumer loans in the banking system have increased 11.6 percent this year and stood at VND85 trillion (US$4.8 billion) at the end of May, central bank Governor Nguyen Van Giau told reporters on Friday.
Banks currently charge annual interest rates of 12-16.5 percent for consumer loans.
Since the beginning of the year, outstanding loans granted for buying shares have gone up 4 percent and outstanding property loans are up 9 percent.
As of May, loans for stock purchases totaled VND7.2 trillion ($406 million) while lending for property reached about VND151 trillion ($8.5 billion), Giau said.
Overall credit in the banking system expanded 14 percent from the end of December to May, the governor said.
Bad debts have risen to 2.62 percent from 2.17 percent at the start of the year, he said in a statement on the government’s website.
The government has put in place a package of measures that it values at about $8 billion to stimulate economic growth after gross domestic product expanded just 3.1 percent in the first quarter, the slowest pace on record.
The State Bank of Vietnam will inspect commercial lenders to limit the risk of an increase in bad debt, according to a separate government statement. An increase in lending as part of the stimulus measures has spurred concern that bad debt may increase, the government said.
“The central bank’s policy at the moment is to strictly control money supply to prevent an excess in credit growth, even though we’re trying to avert an economic slowdown,” Giau said.
The government aims to keep credit growth below 30 percent this year, the governor said.
Commercial banks have so far lent VND347.3 trillion ($19.5 billion) this year under the government’s loan-subsidy program, the central bank said on its website Friday.
thanhnien, vietnamplus
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