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Wednesday, July 24, 2024

PM tells SBV to relax rules on lending to real estate projects

The Saigon Times

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HCMC – Prime Minister Pham Minh Chinh has called on the State Bank of Vietnam and relevant ministries to quickly review and relax Circular 06/2023 on lending to make it easier for businesses, including those in the real estate sector, to take out loans.

In a directive issued on August 16, Deputy Prime Minister Le Minh Khai is tasked with working immediately with the Governor of the SBV and relevant ministries to review and rectify those provisions in Circular 06 that make access to loans difficult.

The SBV issued Circular 06 on June 28 this year to revise and supplement a couple of provisions in Circular 39/2016/TT-NHNN dated December 30, 2016 regarding lending operations by domestic banks and foreign bank branches. It is due to take effect on September 1.

The circular adds cases in which banks are prohibited from providing loans for capital contribution and investment cooperation to implement projects that are ineligible for commercial operation. Experts said that this provision would make it tough for real estate companies, home buyers and investors to borrow.

According to statistics from the Ministry of Construction, only seven real estate projects were completed in the second quarter of this year, with over 2,420 apartment units. This number is half of what was completed in the first quarter and shows a 30% decrease compared to the same period last year. Project execution delays are attributed to legal and capital-related obstacles.

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