The State Bank of Vietnam (SBV) will consider adjusting the credit growth limit for each bank following its decision to raise the limit by 1.5-2.0 percentage points on December 5, an official has said.

SBV Deputy Governor Dao Minh Tu said the allocation of credit growth limits will prioritize banks with strong liquidity and the capacity to reduce interest rates.

Some banks, such as Agribank, are still to hit the credit growth limit allocated at the beginning of the year, so there is no need to increase the existing limit, Mr. Tu believes. On the other hand, the SBV will impose limits on banks offering high interest rates.

“Thus, the new credit growth limits aim to encourage commercial banks to mobilize capital resources and cut interest rates, creating favorable conditions in regard to both capital resources and interest rates for businesses, projects, and programs that play a key role in the economy,” the Deputy Governor said.

Credit growth stands at 12.2 per cent, lower than the limit of 14 per cent. This means there is still room for commercial banks to provide additional capital for businesses and the economy.

The SBV will also assign the Vietnam Banks Association to urge commercial banks to lower interest rates to help businesses. However, such a move should depend on the financial capacity of each credit organization, Mr. Tu said.

“In the current context, cuts to interest rates by banks to support enterprises must ensure their liquidity and safety and liquidity and safety in the banking system as a whole,” he said.

He also called on commercial banks to proactively mobilize idle capital from society once they are allocated more credit space.

The management of money flows and the supervision of commercial bank operations is also necessary, he added.

“The SBV has called for money flows to be prioritized to areas such as agriculture and rural development, small and medium-sized enterprises (SMEs), export enterprises, and supporting industries, and especially areas that drive economic growth,” Mr. Tu said, adding that “this is also in line with the government’s direction.”