Acting on behalf of the government in disbursing capital for the nation’s important projects, the Vietnam Development Bank (VDB) has been found committing serious violations.
VDB was established in 2006 as a not-for-profit bank which receives subsidy from the state for interest rate differences, and management and payment-guarantee fees.
|Under Decision No 1515 released in 2015, the government authorized the Ministry of Finance (MOF) to manage and exercise owner’s rights and duties. VDB has huge charter capital of VND30 trillion.|
A report fromMOF showed that the outstanding loans the bank provides is VND100 trillion each year. It also issues tens of trillions of dong worth of bonds.
At a recent workshop, Nguyen Chi Trang, deputy general director of VDB, said VDB was holding and disbursing 60 percent of ODA capital. As of August 31, 2018, VDB’s foreign outstanding loans had reached VND152.9 trillion.
The government’s inspectors have found that VDB did not observe the current regulations when disbursing VND757 billion for contractors in the project on expanding Thai Nguyen Iron and Steel JSC (TISCO). To date, VDB still has not implemented the restructuring of principal and interest for TISCO. The steel manufacturer’s credit is still listed in fifth group credit (the loans with worst quality).
Vietnam needs to renew its real estate market to attract more foreign investors and increase the quality of foreign direct investment (FDI) in the sector, according to experts.
Private capital is the best solution for upgrading of power transmission lines, which have traditionally been funded by the state.
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