A transaction office of Agribank According to the SBV, credit institutions must strictly comply with previous legal documents on civil loans and credit card issuance, especially those on credit interest rates surcharges, calculation methods and transparency. This means these institutions must make public their lending activities, such as standardised contracts listing, providing clients with information on lending rates, as well as establishing concrete interest rates determinants, including adjusted rates, overdue rates and other extra charges, before finalising a loan agreement. Regarding consumer finance companies, the SBV is working on promulgating more in-depth regulations on uniform loan interest rates across the entire market to prevent fraudulent lending. The SBV also ordered credit institutions to tighten credit control, by timely detecting malpractice and strictly handling violations of consumer lending regulations to protect customers’ interests. … [Read more...] about SBV to probe credit institutions’ operation
The central bank said limiting loans to the real estate sector is aimed at ensuring its sustainable development and the safety of the banking sector. — Photo vneconomy.vn On November 15 the State Bank of Viet Nam replaced its previous circular on operational safety ratios for the banking sector with Circular No 22. To take effect on January 1 it focuses on two changes that will tighten banks’ lending to the property sector. They are a reduction of the ratio of short-term funds that can be used for medium and long-term loans from the current 40 per cent to 30 per cent by September 2022 in four phases, and the increase in the risk ratios of mortgages from the current 50 per cent to up to 150 per cent and loans for commercial real estate to 200 per cent. Analysts said the central bank’s moves are aimed at cutting off credit to high-risk sectors, especially property. The central bank said limiting loans to the real estate sector is aimed at ensuring its sustainable … [Read more...] about Central bank tightens lending for property sector
Some central banks have loosened monetary policy to promote economic growth. Bloomberg reported that the US FED has decided to keep the reference interest rate unchanged at 2.25-2.5 percent after a meeting discussing the monetary policies last week. ECB has also signaled the prime interest rate cut soon and the possibility of resuming the quantitative easing program if the inflation rate continues to be much lower than the targeted 2 percent. Australia, India and Russia have also slashed interest rates in an effort to boost economic growth. Bui Quang Tin, chair of Bizlight Business School, said there is a possibility of the US-China trade war turning into a monetary war. “Amid uncertainties, the moves by the central banks of cutting interest rates to support the economies are unreasonable behavior,” Tin commented. The US FED may issue the first interest rate reduction since 2008 because of uncertainties the economy is facing. Observers believe the US FED is very … [Read more...] about Will Vietnam loosen monetary policies?
Taking advantage of the period during which Vietnamese banks are focusing on restructuring and bad debt settlement, foreign banks have been gearing up for bigger market share. According to the State Bank of Vietnam (SBV), the total assets of foreign banks by the end of 2018 had reached VND1,137 trillion only, less than a quarter of total assets of Vietnam’s joint stock banks or state-owned banks, but their growth rate was very high, 19.12 percent, or 50 percent higher than joint stock banks and triple state-owned banks. Dien Dan Doanh Nghiep quoted its sources as reporting that the pressure from foreign banks on Vietnamese. There are nine wholly owned foreign banks, while the number of foreign bank branches has increased to 49 with the appearance of Agriculture Bank of China Hanoi and Kookmin Hanoi. Foreign credit institutions have been improving their financial capability. Standard Chartered Vietnam increased its chartered capital to VND3.534 trillion in early 2018 and then to … [Read more...] about Foreign banks make fat profits while Vietnamese are busy settling debts
Much is being done to take Vietnam's banking and finance sector into the digital age, according to industry insiders. Ms. Nguyen Thuy Duong, Deputy CEO, Country Financial Services Leader, EY Vietnam Digital banking will be the future of Vietnam’s banking system, especially amid the development of Industry 4.0. The Vietnamese Government is now in the process of building national financial inclusion strategies with Industry 4.0 in mind, which are expected to be enforced in 2020. This should be the foundation for deploying digital technologies in Vietnam’s banking and finance sector. The financial inclusion roadmap includes changes in the legal framework, financial infrastructure development, IT application, and the diversification of financial products and services. Digital transformation is taking place in Vietnam’s financial services industry, with a host of non-bank innovators offering both customer-facing and back-office fintech products and services. While banks … [Read more...] about New digital era for Vietnam’s banks