Illustrative Image (Photo:VNA)Hanoi (VNA) – The State Bank of Vietnam has directed its supervisors and credit institutions to enhance control on lending to borrowers with large outstanding loans.
Under Document 6373/NHNN-TTGSNH, the central bank also requires credit institutions to increase supervision on credit granting that is higher than allowed limits.
According to the current legal regulations, the aggregate debt balance of one single customer cannot exceed 15 percent of the capital of a bank and 25 percent of the capital of a non-bank institution.
The central bank allows credit institutions to increase lending limits to some customers, but requires the institutions to ensure the credit growth quota allocated by the central bank is maintained.
This year, the entire banking system targets a credit growth of 18-20 percent and the central bank has allocated lending limits to each institution to ensure the target is achieved.
Besides customers in prioritised industries of agriculture, exports, supporting industries, small- and medium-sized enterprises (SMEs) and hi-tech businesses, the increase of lending limits must also focus on production and business, the central bank said.
Lending to risky industries must be restricted, the central bank said.
The central bank also asked credit institutions to ensure safety ratios in lending and to take responsibility when granting lending limits higher than regulated.
Besides this, the central bank also directed banking supervisory agencies to closely supervise post-lending to increase the lending quality and avoid risks.
"Banking supervisory agencies must closely inspect, supervise and assess the use of the loans and solvency possibility of the borrowers, especially those that are either State-owned enterprises or firms with large outstanding loans, to avoid new bad debts from arising," the central bank noted.
The agencies must disclose violation cases early, make timely warnings and ensure strict penalty for the violation, the central bank stated
