SBV controls the flow of loan money into manufacturing and business

DNHN - The State Bank manages credit to help economic growth recovery while remaining agnostic to inflation risks; leads credit institutions to expand credit safely and effectively, directing credit to production and commercial areas.

Governor Nguyen Thi Hong stated that, based on the National Assembly and Government's economic growth targets of about 6-6.5 per cent in 2022 and inflation of about 4 per cent, the State Bank forecasts credit growth of about 14 per cent in 2022, with adjustments based on developments and actual situations.

As a result, the State Bank administers credit to support economic growth recovery while remaining agnostic to inflation risks; directs credit institutions to grow credit safely and effectively, directing credit to production and business fields, priority areas for development as determined by the Government; and creates favourable conditions for people and businesses to access bank credit capital.

The State Bank has implemented and will continue to adopt several solutions to monitor and assure operational safety in sectors with potential hazards, such as the real estate and securities industry.

The State Bank of Vietnam, in particular, has finalized the regulatory framework by issuing legal papers on safety limits and ratios in banking activities.

Furthermore, closely monitor the state of credit provided to potentially problematic locations and provide early warnings. The State Bank additionally increases inspection and examination by integrating inspection information on loan granting operations for potentially problematic industries in the specialized inspection plan for yearly periodic inspections of legal organizations.

The State Bank also directs credit institutions to strictly control credit granting for real estate business purposes, improve credit quality, and require a roadmap to gradually reduce the short-term capital ratio for investors' medium and long-term loans to limit credit institutions from allocating loans to long-term real estate projects; and strengthen thematic inspection and examination of credit granting for the real estate sector. 

In such cases, take note of credit institutions and credit institution branches with fast expanding outstanding loans in areas experiencing land fever and real estate price surges in recent years.

PV