Ratio of short-term funds for long-term loans to be revised (Illustrative image. Source: VNA)Hanoi (VNA) - TheState Bank of Vietnam (SBV) is adjusting for the second time the roadmap toapply the maximum ratio of short-term funds used for medium- and long-termloans.
According to a new draft circular to revise Circular No36/2014/TT-NHNN on regulating prudential ratios for credit institutions andforeign bank branches, the maximum ratio of short-term funds used for medium-and long-term loans will be at 45 percent in 2018 and 40 percent in 2019.
This is the second time the roadmap for the ratio is beingrevised.
The first amendments to the circular were made in May last yearwith the ratio reduced from 60 percent in 2016 to 50 percent from January 1,2017 to December 31, 2017. It will drop to 40 percent from the beginning of2018.
The SBV said the second adjustment is based on its assessment andscrutiny of the country’s economic indicators in the first months of 2017 aswell as the Government’s macroeconomic regulation direction in the last monthsof the year.
The new draft circular has been made public on the SBV’s websitefor recommendations.
Earlier, during a regular Government meeting in May, PrimeMinister Nguyen Xuan Phuc issued a resolution in which he directed the SBV toconsider and adjust expansion of the credit limit for medium- and long-termloans of credit institutions.
The Government has also affirmed that the capital adequacy ratiosapplied for credit institutions and foreign bank branches that participate inprogrammes and projects under the Government’s instruction will be differentfrom the average ratio. For example, for the lending programme on encouragingdevelopment of the hi-tech agriculture industry, Deputy Prime Minister Vuong DinhHue has asked the SBV to consider the proposal of commercial banks to notinclude medium- and long-term loans for the programme in the maximum ratio ofshort-term funds used for medium- and long-term loans mentioned above.
According to the SBV, the medium and long-term capital sourceshould be supplied via the securities channel, but in Vietnam, this source ofcapital is still mainly mobilised via the banking channel.
The SBV’s statistics revealed that medium and long-term loansstill account for 53-55 percent of the total loans, while medium- and long-termmobilised capital is only 13-15 percent of total mobilised capital.
The SBV is concerned it is a risk for the banking industry ifthere is an imbalance in the ratio of short-term capital for medium- andlong-term loans.-VNA
VNA
