31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Apr 15, 2021 / 14:27

Central bank to tighten credit in “overheating” sectors: Governor

The central bank will continue to monitor actual economic situation and that of the pandemic to expand credit support appropriately.

The State Bank of Vietnam (SBV) will step up measures in tightening credit into risky fields and sectors, which have been overheating recently, including real estate, securities, and built-operate-transfer (BOT)/ build-transfer (BT) transportation projects.

SBV Governor Nguyen Thi Thu Hong made the comment at an online conference discussing credit growth in the banking sector on April 14.

 SBV's Governor Nguyen Thi Hong. Source: SBV

“Commercial banks are expected to enhance risk management in offering loans for private use to ensure safety in banking operation,” said Hong.

Delving deeper into credit performance in the past months, Director of SBV Credit Department for Economic Sectors Nguyen Tuan Anh said the Covid-19 resurgence in the country in early 2021 posed negative impacts on socio-economic activities, especially in catering and hospitality services, transportation, and tourism, leading to a lower demand for credit.

“The central bank would continue to monitor actual economic situation and that of the pandemic to expand credit support appropriately, focusing on priority fields [agriculture, industry, small and medium enterprises] in line with the ongoing economic restructuring process to ensure sustainable development,” said Anh.

Vietnam’s credit growth as of March 31 expanded by 2.93% against late 2020 with a total outstanding loan of VND9,460 trillion (US$410.68 billion).

 Overview of the conference. Source: SBV

Credit institutions and banks have restructured debt payment for nearly 263,000 customers affected by the Covid-19 pandemic with outstanding loans of VND353 trillion (US$15.32 billion).

Meanwhile, over 660,000 customers with existing loans of VND1,270 trillion (US$55.14 billion) were subject to waver, freezing and reducing of interest rates.

From January 23 to date, banks have provided new loans for 452,000 customers with preferential lending rates lower than the level in the pre-Covid-19 pandemic worth over VND3,000 trillion (US$130.25 billion).

For this year, the Vietnamese central bank set a growth target of 12%, around the same level set in 2020, which the SBV’s Governor Hong said is a reasonable target, given the banks’ priorities are to enhance credit quality, control credit flow into risky businesses and address difficulties for businesses and people.

“The ultimate goal in this regard is to help the economy reach the government’s GDP growth target of 6.5% year-on-year,” stated Hong.