31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Jun 17, 2022 / 12:39

Vietnam parliament calls for removing credit quota policy

Such a move would help ensure transparency and openness in banking operations while staying in line with Basel II standards and other international practices.

The National Assembly (NA) approved a resolution on the interpellation of the third session on June 16, which called for the Government to consider abolishing the credit quota policy for commercial banks.

 Customers at a BIDV branch in Hanoi. Photo: The Hanoi Times

In this regard, the NA wanted the Government to set up criteria that help banks to identify their respective credit targets based on business performance, financial, and governance capabilities.

According to the resolution, such a move would help ensure transparency and openness in banking operations, while staying in line with Basel II standards [It requires banks to have a capital adequacy ratio (CAR) of at least 8%] and other international practices.

In a discussion session on June 8, several NA deputies questioned the Governor of the State Bank of Vietnam Nguyen Thi Hong on the credit quota policy as this is no longer a common practice applied by countries around the world.

In Vietnam, the SBV has adopted such a policy for more than a decade and it would help control credit that could otherwise present a high risk of liquidity loss in the banking sector.

Meanwhile, the NA also called for the Government to soon mobilize resources for the socio-economic recovery program for the 2022-2023 period, estimated to be around US$15.4 billion, along with solutions to contain inflation and rising prices of strategic commodities under state administration.

The resolution stressed the necessity to revise regulations on corporate bond issuance via placement, and prevent banks’ credit from going into fields of high risk, such as real estate and the stock market.