Lending from deposit to be removed from Sept.01

The State Bank of Viet Nam (SBV) has decided to stop restricting commercial banks from lending over 80% of their deposits to increase capital mobilization.

This is part of Circular 22  released by the SBV on August 30 with a view to cutting interest rates.

The Circular, which will take effect from September 1, 2011, also lifts the ratio of 85% for non-banking credit organizations.

The move is regarded as a positive signal for the domestic monetary market and ease burdens for banks which are in charge of raising credit growth and reducing interest rates.

However, commercial banks still have to comply with Circular 13 to increase the capital adequacy ratio of 9%, apply credit limits to each group of customers, ensure payment capacity, capital contribution and shares in enterprises.

Hương Giang

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