Central bank gets tougher on violators

The State Bank of Vietnam (SBV) has issued a directive according to which senior bank managers will be suspended for 3 years if their banks lend over the cap.

The directive, which took effect yesterday, also said violating banks would also be scrutinized and suspended or limited from expansion and lending activities for a certain period of time.

Bank watchdogs and SBV’s branches will have to work harder and maintain a hotline for timely reports on the issue, the directive said.

In a recent meeting with banks, SBV’s governor Nguyen Van Binh said the central bank would do everything to reduce the lending rate to 17-19 percent per year such as keeping the interest rate ceiling of 14 percent per year on dong deposits and 2 percent per year on dollar deposits.

At the meeting, SBV also discusses ways to help capital-strained small banks such as providing VND10-15 trillion to finance 10 such banks or becoming the majority shareholder of these banks.

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