HANOI (Reuters) – The State Bank of Vietnam (SBV) said on Wednesday it has raised caps on credit growth for some banks this year, based on their latest operational results, market developments and proposals.
The move is designed to boost lending for some banks without encouraging excessive credit growth, and only banks that meet certain requirements on interest rates and management of bad debt will be allowed an upward adjustment to their credit growth, the SBV said. It did not name any banks.
Vietnam in 2012 saw a crisis of non-performing loans that was blamed for putting the brakes on several years of booming growth in the Southeast Asian manufacturing hub.
“With the raise, businesses and individuals will have better access to capital. However, capital granted must go to fields prioritised by the government such as production, not to risk-potential areas,” the SBV said.
Several local banks have already neared the overall credit growth limit of 14% for 2022, and the risk remains of a further rise in non-performing loans, it added.
Vietnam is targeting growth of 6.0%-6.5% and inflation below 4% this year. Consumer prices in August rose 2.89% from a year earlier. Credit growth was at 9.91% at end-2021.
(Reporting by Phuong Nguyen; Editing by Martin Petty and Kanupriya Kapoor)
