Banks in HCM City Stop Loaning to Securities Traders

Almost all commercial banks in Ho Chi Minh City said they have no longer provided loans for securities investors for fearing to violate the new regulation by the State Bank of Vietnam, the country’s central bank.

 

Their loans for securities investors have now surpassed the required level of 3 per cent of banks’ outstanding loans, state media reported on Tuesday.

 

State Bank of Vietnam recently issued the new regulation that is effective from June 15, requesting that local credit institutions be not allowed to lend over 3 per cent of their outstanding loans to securities trading, aiming to maintain sustainable development of the stock market and minimize risk to loans.

 

However, the regulation is forecast to bring bad impact on the stock market because a big amount of money flowed into the market comes from banks, foreign investment and production investment. 

 

The Ho Chi Minh City-based banks said they would liquidate but not grant extension for the matured loans as they used to do before. (Youth, Securities Investment Online)