Illustrative photo (Source: cafef.vn)HCM City (VNA) - The new restriction onbanks of using only 40 percent of their short-term deposits for long andmedium-term loans should not take effect next year, the Ho Chi Minh City RealEstate Association (HoREA) has said.
In a document to the Government and the State Bankof Vietnam (SBV), HoREA said it is not necessary, it is not practical and doesnot meet the requirements of developing the real-estate market. The rate shouldremain at 45 percent, it suggested.
HoREA mentioned in its documents circulars issuedby the SBV, including circular 36/2014/TT-NHNN, 19/2017/TT-NHNN, in which themaximum level that banks can use to give long and mid-term loan was 60 percentin 2016 and 50 percent in 2017. It will then drop to 40 percent by January 2019.
The association said the law requires propertydevelopers to have own capital of 15-20 percent of the project cost and canborrow the rest.
But banks are unable to meet that demand sinceshort-term deposits account for a large proportion of their total deposits, theassociation said.
The second reason the association wanted the newregulation to be delayed was the sharp decline in the property market in thefirst nine months of the year as credit to the sector fell to the lowest levelin three years.
But next year the market would rebound, driven bythe mid-priced segment, the association said.
The industrial property market would also growstrongly since many foreign investors are choosing Vietnam to move into, itsaid.
This would also boost the office and hired apartmentsegments, it added.-VNA
VNA
