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Vietnam cuts compulsory reserves for several lenders
The State Bank of Vietnam said on Friday it has cut the compulsory reserves level for banks with large agriculture lending to one-fifth their regular rate from February through July.
The favourable reserve requirement rates have been given to Agribank, Lien Viet Post Bank, Mekong Housing Bank, Me Kong Development Bank, the central bank said in a statement.
Central bank governor Nguyen Van Binh has said agriculture lending should be the banking system's top priority this year. Over-lending in recent years to sectors such as real estate and stocks has stoked inflation and caused bad debt levels to rise.
Vietnam is the world's leading exporter of robusta coffee and the second largest rice exporter, after Thailand. Between 70 and 80 percent of the Vietnamese population of about 87 million live in rural areas.
Binh has stipulated that state-run Agribank, the country's biggest bank by assets, extend 75-80 percent of its total lending to agriculture while other lenders should devote at least 20 percent of their credit to the sector.
Lenders who devote 40-70 percent of their loans to agriculture in the latest fiscal year will be eligible for a reduction in their reserves requirement, the central bank statement said.
The current reserve requirements on the banks getting their levels reduced was not clear. The central bank has been applying compulsory reserves levels of up to 3 percent for dong deposits and up to 8 percent for foreign exchange deposits, depending on the terms.
The central bank has targeted total credit growth this year at between 15 and 17 percent, compared with an expansion of 10.9 percent in 2011.
reuters
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