The State Bank of Vietnam (SBV) is increasing credit growth quotas for banking institutions on a case-by-case basis in a move to stimulate lending.
The measure is being taken amidst the lukewarm expansion in credit growth seen so far this year
Banks that have fulfilled 80% of the credit growth quota assigned earlier this year will be allowed to exceed that limit, based on their 2022 ratings, the central bank said Thursday, adding that their new limit was sent to each bank Wednesday.
Greater additional quotas have been given to banks that have cut lending rates and pumped cash strongly into the government’s priority areas, the SBV said.
It has also reminded commercial banks to adhere to safety criteria, manage risks properly and simplify approval procedures for earlier loan access.
The SBV’s decision has come after total outstanding loans in the banking system grew 8.21% in the year to November 22, much lower than the 14-15% goal set early this year, which was revised to 14.5% in July.
Some banks have recorded below-average credit growth and some others have even experienced contractions, an SBV statement said.
Since the economy has underperformed for most of this year, Prime Minister Pham Minh Chinh has repeatedly called for fiscal loosening and accommodative monetary policies towards achieving the highest GDP growth possible.
The relatively weak economic performance has been attributed to weak external demand that has severely hurt local businesses.
GDP growth reached 4.24% in Jan-Sept, only higher than the figures for the same period of 2020 and 2021 when Vietnam was suffering from the Covid-19 pandemic. The government has admitted that the full-year growth could be 5%-plus, lower than the targeted 6-6.5%.