A client makes a transaction at a branch of Vietcombank in Hanoi. SBV requests local credit institutions and foreign banks’ branches to restrict lending concentration for the real estate and construction. (Photo: VNA)After an investigation, potential risks have been found in severalcredit institutions that have provided lending to investment and trading inreal estate and/or securities, according to the SBV.
It reports that non-performing loan ratios of some credit institutions arehigher than previous years.
The credit for the real estate sector accounts for a large ratio in thenon-performing loans. Investment in corporate bonds for the use of real estatedevelopment and trading also accounts for a high proportion of loans.
The State Bank requires all credit institutions to strictly overseeloan use purpose and the disbursement of credit for large-scale real estateprojects. In addition, commercial banks must strengthen supervision and riskprevention measures. They are asked to carefully consider providing loans forreal estate projects in “overheating” areas with potentially high risks.
Regarding lending for the needs of daily life, the SBV asks all creditinstitutions to carefully review those who are eligible for loans to avoidcreating risks and strengthen supervision of the use of loans.
Credit institutions must also arrange capital sources to offer borrowers forthe demands of their daily life and monitor lending quality for consumptionpurposes and strengthen activities of internal audits.
Concerning lending for securities, commercial banks must control the growthrate of outstanding loans for securities investment and trading to avoid risks.Banks are required to comply with regulations on credit granting criteria andtrading of shares, corporate bonds and other related legal regulations.
For Build-Operate-Transfer (BOT) and Build-Transfer (BT) projects, creditinstitutions must balance their capital flow and use loans for medium andlong-term projects to limit liquidity risks and continue to strictly complywith the instructions of the SBV.
The State Bank also requires credit institutions strengthen inspectionsand supervision of the use of loans and corporate bond issuance to ensure theproper use of investment capital and regularly monitor and uncover any unusualsigns.
It is asking commercial banks to continue improving credit quality and activelyhandle bad debts and implement classification of assets, levels and method ofsetting up of risk provisions, and use of provisions against credit risks inthe banking activity of credit institutions, and foreign banks./.
VNA
