The State Bank of Viet Nam (SBV) has required commercial banks to control their credit growth in line with their capital mobilisation ability and credit growth limits set by SBV.

Under a document issued on Tuesday, SBV said the control is aimed to ensure the credit growth of the entire banking system is safe and efficient.

According to the current regulation, SBV assigns an annual credit growth quota for each bank at the beginning of the year depending on the bank’s health at the year’s start. This is done to control credit growth for the entire banking system and to support government targets of economic growth and inflation control.

However, just after half a year of this, many commercial banks have already used up most, if not all, of their assigned quota for the whole year.

Under the new document, SBV also required commercial banks to focus their lending on production, business and priority sectors, such as agriculture businesses, firms producing goods for export, small- and medium-sized enterprises, enterprises operating in auxiliary industries and hi-tech enterprises including startups.

“Commercial banks must meet lending demands and apply a preferential interest rate of 6.5 per cent per year for loans of borrowers in the priority sectors,” SBV noted.

On the other hand, SBV also directed commercial banks to strengthen the internal inspection and auditing to timely detect violations of lending interest rates and enact strict measures on the cases.

Banks were also instructed to reduce operating costs and improve business efficiency so as to further reduce the lending interest rate for priority sectors as well as production and business areas. — VNS