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The State Bank of Vietnam (SBV) has announced adjustments to credit growth targets for credit institutions. On August 28, 2024, the SBV issued a document informing credit institutions of the additional credit growth targets, ensuring transparency and fairness.
Specifically, from August 28, 2024, credit institutions with a credit growth rate in 2024 reaching 80% of the target set by the SBV at the beginning of 2024 will be allowed to proactively adjust their credit balance based on their ranking.
The SBV emphasized that this additional quota is an initiative taken by the central bank, and credit institutions do not need to make a request for it.
At the same time, the SBV requested credit institutions to strictly adhere to the directives on monetary and credit activities and the provisions on credit extension to improve business efficiency, ensure system safety, and maintain stability in the money market. Credit growth should be safe, effective, and healthy, with a focus on preventing and controlling bad debt, and ensuring the safe operation of credit institutions.
Credit should be directed towards production sectors, priority areas, and sectors that drive economic growth in line with the Government and Prime Minister’s policies. Strict control should be maintained over areas with potential risks.
It is important to maintain stability in deposit interest rates and actively implement solutions to reduce operating costs, simplify loan procedures, and apply information technology and digital transformation to lower lending interest rates.
Credit institutions are required to comply with legal regulations when extending credit to customers, strengthen risk control measures, and ensure credit quality.
Going forward, the SBV will closely monitor domestic and international market developments and stand ready to provide liquidity support to enable credit institutions to supply credit to the economy and promptly implement appropriate monetary policy measures.
Earlier, at the beginning of 2024, the SBV assigned a credit growth target of around 15% to credit institutions as per Directive No. 01/CT-NHNN dated January 15, 2024. However, by August 26, 2024, the credit growth of the entire system reached only 6.63% compared to the end of 2023, significantly lower than the target set for the year. The credit growth of credit institutions varied, with some institutions recording low or even negative growth, while others approached the target communicated by the SBV.
Therefore, to implement the Government and Prime Minister’s directives on flexible, effective, and timely credit growth management, meet the capital needs of the economy, and control inflation and macroeconomic stability, the SBV proactively adjusted credit growth targets for credit institutions. This move also aligns with the National Assembly and Government’s policy of gradually phasing out the practice of assigning credit growth targets.
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