The State Bank of Vietnam (SBV) has allocated a credit growth limit of 15 per cent this year for the country’s credit institutions.

It requested that credit institutions extend credit in a safe and healthy manner, ensuring lending growth is in line with their capacity in risk management, liquidity, and capital mobilization, guaranteeing credit quality and the effective use of funds as well as safe operations while preventing bad debts from increasing.

Credit institutions were guided to direct credit into production and business operations, which are priority areas and the drivers of the economic growth, in accordance with government policy.

The central bank also required that credit institutions tighten control over the provision of loans to risky areas.

Credit institutions are banned from providing loans illegally or providing preferential interest rate loans to their executives and relatives and businesses within their ecosystem and “backyard” companies, according to the SBV.

It instructed banks to continue stabilizing the common deposit interest rate and to attempt to reduce lending rates. They should also regularly review and cut administrative procedures while simplifying lending processes and procedures, ensuring full compliance with applicable laws in order to create conditions for businesses and individuals to access bank credit.