Sunday,  Oct 21, 2018,01:23 (GMT+7) 0 0
Central bank: Property loans under strict control
By Minh Tam
Wednesday,  Jun 13, 2018,21:13 (GMT+7)

Central bank: Property loans under strict control

By Minh Tam

A customer transacts with a domestic commercial bank. Property loans have been put under tight control since early this year, according to the central bank - PHOTO: UYEN VIEN

HCMC – Property loans have been put under tight control since early this year, with outstanding loans in the sector growing an insignificant 2.19%, said the State Bank of Vietnam (SBV).

Speaking at a meeting in HCMC on June 13, Nguyen Quoc Hung, director of the SBV’s Credit Department, said bank loans ran strongly into primary industries, industrial construction and priority sectors in January-May.

Meanwhile, credit for property development, and build-operate-transfer and build-transfer infrastructure projects declined, resulting in modest growth of 2.19% and 2.15% respectively. Loans for stock investors even dropped 3.92% in the period.

The figures showed the SBV’s management and inspection measures paid off, Hung said.

Nguyen Hoang Minh, deputy director of the SBV’s HCMC branch, said banks in the city reported credit growth of 6.42% in the first five months. The figure is estimated at 7.5% at the end of June, above the nation’s average.

Banks in HCMC made VND1,890 trillion loans in the period, with 70% of them going to production, 10.8% to the property sector and 13.2% to securities investors and consumers.

Since 2016, outstanding property loans in HCMC have grown around 10%, way below 31-33% in the 2007-2008 period. Authorities have asked banks to strictly observe lending procedures and make sure only qualified property investors can borrow, Minh added.

At another meeting early this week, SBV deputy governor Nguyen Thi Hong said the central bank will continue its monetary policy in an active, cautious and flexible manner and combine it with other fiscal and macro-economic policies to control inflation, ensure liquidity in the banking system, and stabilize monetary and foreign exchange markets.

The SBV will also flexibly manage central rates to stabilize the macro economy. It bought huge amounts of foreign currencies, thus expanding the nation’s foreign exchange reserves and strengthening confidence in the Vietnamese dong currency. The gold market has remained stable, Hong was quoted by Lao Dong newspaper.

Lending rates for businesses in priority fields have decreased, with State and commercial banks cutting interest rates by about 50 basis points for creditworthy consumers.

Currently, interest rates of short-term loans stand at 6-9% while those of mid and long-term loans from 9% to 11%. Borrowers with high creditworthiness and financial capability could enjoy annual rates of 4-5%.

In addition, the SBV took a number of measures to speed up cashless payments and directed credit organizations to apply technology in technical infrastructure in payment to enhance security and protect consumer interests.

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