Radical restructuring pushed for sustainable growth of credit institutions
Updated : Thursday, May 10, 2018 8:55 AM (GMT+0700)

Thebanking industry has been radically restructuring credit institutions incombination with handling bad debts to ensure their safe, healthy andsustainable growth, said a central bank senior official.

A forum is held in Hanoi on May 8 to discuss the 2018 banking industry towards sustained
growth - Photo: Nhan Dan

Deputy Governor of StateBank of Vietnam (SBV) Nguyen Kim Anh made the statement at a forum on the 2018banking industry towards sustained growth held in Hanoi on May 8.

According to Anh, therestructuring of credit institutions has so far been positive with the non-performingloan ratio of the entire banking system being kept at below 3 percent.

To ensure the sustainedgrowth of the banking industry, the central bank will soon finalise theappraisal and approval of credit institutions’ restructuring plans besidesclosely supervising their operation, especially ailing ones, to timely takeactions.

The SBV has so far approvedthe restructuring plans of most banks. However, the restructuring plans offinancial companies and financial leasing companies are still being prepared.

As for State-ownedcommercial banks, the restructuring will focus on enhancing the banks’financial status after their restructuring plans are approved by the PrimeMinister, Anh said, adding that according to a decision issued last year the onrestructuring credit institutions in combination with non-performing loansettlement for 2016-20, State-owned banks must improve their charter capital tomeet Basel standards.

The SBV’s Deputy ChiefInspector Pham Huyen Anh said the central bank will also resolutely deal withthe cross ownership and violation of the limit regulation on ownership ofshares at banks to avoid group interests, which could cause damage to theentire banking system.

Solutions on trading NPLsaccording to the market mechanism will also be implemented together withmeasures to control risks of the trading method, he noted.

At the forum experts praisedthe SBV’s handling of monetary management policy in recent years, noting it hashelped stabilise the macroeconomy, support economic growth, and createconfidence among investors.

The SBV has taken rationalsteps to manage monetary policies, said Vice Chairman of the NationalAssembly’s Economic Committee Nguyen Duc Kien.

Credit growth target wasalways included in the Government’s annual report to the National Assembly as amandatory goal that required the SBV to pump money to achieve it if necessary,Kien said. It is now just an indicator for reference, he added.

Echoing Kien’s view, PhamThanh Ha, Director of the SBV’s Monetary Policy Department said the SBV hasshifted its focus on ultimate goals to maintain a stable money value, controlinflation and support economic growth.

Nguyen Xuan Thanh, Directorof Fulbright University Vietnam, said the monetary management policy isoperating so well that the central bank should not loosen it.

The SBV had to do so a yearago to support economic growth, which reached only over five percent in thefirst quarter of 2017, Thanh noted, adding that the country’s GDP growth lastyear was supported significantly by the monetary policy.


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