State Bank checks out lending portfolios

Hanoi (VNA) - The State Bank of Vietnam (SBV) on Oct. 28 asked its own branches, as well as all Vietnamese banks, joint venture banks and foreign banks in Vietnam to report credit activities, outstanding loans and lending interest rates in VND.

Banks must show the percentage of loans charged at over 19.5 percent, at
18-19.5 percent, at 17-18 percent and under 17 percent per year as of Oct.
28.

The latest order by the central bank was designed to ensure domestic banks
create favourable conditions for cash-strapped local companies to access
bank loans.

Last week, the central bank signalled a somewhat looser monetary policy,
doubling interest rates to 10 percent annually for compulsory commercial
bank reserves and paying off treasury notes worth 20.3 trillion VND (1.22
billion USD) issued to local banks in March.

The move was intended to help domestic banks increase funds to cut lending
interest rates. However, several provinces and business associations
reported via the State Bank's hot-line that it was still difficult to get
bank loans because the bank's interest rate reduction was not enough.

According to SBV statistics released last on Oct. 24, State-owned banks
generally charged loans at 18.5 percent per year, down 0.5-1.7 percentage
points. For preferential customers, lending interest rates stretched from
16.8 to 17.2 percent annually. Joint stock banks generally cut lending rates
by 0.5-1.0 point to under 19.5 percent per year.-Enditem