Sun. Apr 21st, 2024

The State Bank of Vietnam (SBV) has instructed its municipal and
provincial branches nationwide to closely monitor and inspect consumer
loans given by commercial banks.

The move is expected to
ensure consumer-lending operations comply with applicable regulations
and protect the rights of borrowers.

branches, transaction offices and the service introduction points of
credit institutions must publish detailed interest rate information
applicable to each product group and each loan product.

Additionally, the SBV branches, in collaboration with the banking
supervisory agency, must strictly handle violations detected through
inspecting and monitoring the activities of credit institutions in the
respective areas.

The move was made after experts
recently said that some banks had loosened their lending conditions for
consumer loans to boost lending since deposits continue to rise amid
slow credit growth. Some even offered consumer loans without mortgages
or collateral.

According to the SBV, total deposits
rose 9.48 percent in the first seven months of the year, while lending
increased only 4.91 percent.

Additionally, the credit
growth target of 12 percent set by the central bank for 2013 has also
made many banks seek ways to loosen their lending conditions.
Previously, banks applied strict requirements to their lending
conditions for consumer loans in order to limit risks and avoid bad

Bad debts were on the rise, experts said,
warning that if banks try to achieve credit growth at any cost, it would
create bad consequences for the entire banking system, as well as the

By vivian