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Commercial banks feel uneasy waiting for central bank to take the roll call
The names of the commercial banks belonging to the four groups categorized by the central banks have not been released. Meanwhile, commercial banks say they need to know what group they belong to, so as to draw up their business plans.
The central bank released the Instruction No 1 on the monetary and credit policies in 2012.
In the instruction, the central bank has allocated credit growth targets to four groups of commercial banks. The first group of banks, which includes healthy banks, can obtain the maximum credit growth rate of 17 percent. The second group, including the ones operating at average level, can have the credit growth rate of 15 percent. The “quota” is 8 percent for the third group, including below-average banks. Meanwhile, the banks belonging to the fourth group, the weak banks, will not be allowed to have credit growth.
In a press conference, Deputy Governor of the State Bank of Vietnam Nguyen Dong Tien said that there are “several weak banks,” but declined to give the names of the banks.
The statement by Tien has made banks feel worried and made people make wild guess about who the bad banks are. Meanwhile, bank officers all try to reassure clients that the bad banks are not them. Analysts have commented that once the names of the bad banks are exposed, depositors would rush to withdraw money from the banks, which may lead to the collapse of the banks and of the whole banking system.
Nevertheless, economists have warned that the information would be exposed, sooner or later, because the boards of directors of the banks would have to release the information at the shareholders’ meetings. As such, the State Bank will have to prepare solutions to the problems that may arise.
Le Duc Tho, Deputy General Director of Vietinbank, said that the State Bank should give official information about the four groups of banks, so that banks can take initiative in their business and restructuring plans.
Opinions still vary about the credit growth rate limits set up by the State Bank. An economist said that the big advantage of the new instruction is that it will force commercial banks to focus on restructuring and improving their liquidity rather than on credit growth rate. However, the banks which are allowed to obtain the growth rate of eight percent, or not allowed to have credit growth in 2012 would meet big difficulties.
“This would be a big danger, if a bank cannot grow its credit,” he commented.
General Director of a bank said that the five or eight percent credit growth rates would be acceptable for the banks in other countries, but the rates are really low in Vietnam, a young economy that needs capital to develop.
“If a bank cannot have credit growth rate, this would be a dead bank,” he said.
In the latest news, some banks have sighed with relief when receiving information about the bank classification from the central bank. General Director of Nam A Bank Tran Anh Tuan said that Nam A has been put into the second group, which means that the bank would have the maximum credit growth rate of 15 percent in 2012.
After receiving the information, the board of directors of the bank has gathered a meeting and decided to focus on lending to small and medium enterprises.
Nguyen Thanh Toai, Deputy General Director of ACB, said though he still has not got official information about the classification, but he believes that his bank would be a first-group bank. Meanwhile, another banker said he has been put on the tenterhooks and he can feel the hard pressure from shareholders. The board of directors has successfully persuaded shareholders to pump more capital to raise the chartered capital to 3 trillion dong.
“We have just finished the capital increase process. If we cannot increase credit, this would be a big problem,” he complained.
vietnamnet
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