The State Bank of Vietnam (SBV), the country’s central bank, will continue to support small banks that are in critical trouble due to a lack of liquidity and are unable to mobilize capital from the open market due to sub-standard paper, SBV said in a document sent to commercial banks May 13.
The troubled banks must submit daily reports specifying on how much money they need to the central bank for consideration. Applicants must also pledge not to lend the money, the Labor newspaper said.
SBV Governor Nguyen Van Giau has ordered his officers to monitor commercial-bank credit growth; available capital and the usage of refinance capital.
The central bank has also acted to ensure control over the capital deficits; available capital and interest rates of the commercial banks.
It has not publicized any of the candidates for refinancing; nor have the commercial banks which need more funds identified themselves.
The refinanced capital will attract the yearly 7.5 per cent interest that had prevailed since February 1, Giau said, adding that valuable papers or credit documents had been used as collateral.
The governor, however, said the interest was nominal and the central bank was working to make it more suitable.
The adjustment was likely to be up.
Recently, the tightening of monetary policy to fight inflation has left commercial banks from north to south hungry for capital.
Banks in HCM City and Hanoi have reported only modest deposit growth during the past few weeks. About 15-20 banks go to the open market each day to raise money at more than 30 per cent interest rate yearly.
But it seems to be not enough to satisfy demand.
Some seek relief from the liquidity shortage in the non-term deposit rate while the Vietnam Bank Association’s term-deposit rate is capped at a yearly 12 per cent for longer than six months and 11.5 per cent for less than half a year. (Labor)
Vietnamese
