- How does the State Bank classify the groups of credit institutions and allocate targets to each specific group in accordance with the Instruction 01/CT-NHNN on February 13?


Mr. Nguyen Dong Tien: When dealing with the credit control issue, the State Bank held that attention should be paid to the financial capabilities, control capacities and operational quality of each credit unit to allocate credit targets.

In this spirit, the State Bank has classified the credit institutions into 4 groups, in which group 1 including the banks with rather healthy and safe operations in terms of capital size, administration and management abilities will be allocated with the maximum credit growth of 17%. The lesser effective group, the second group, will be able to enjoy the 15% growth, the third group, 8% growth, while the fourth group will be restructured with no credit growth allowed because they manifested certain danger and unsafety.

However, the State Bank will not make public the list of credit institutions in each group. So doing, it could control the total level of credit growth of not over 15% to 17% in 2012.

Actually there is still one more group, particularly the foreign credit institutions which have just increased their charter capital, the State Bank of Vietnam allows them to increase their credit corresponding to their charter capital.

After 6 months, the State Bank will reassess the whole process of implementation to see if there is any unit which operates well, it will adjust the credit institution from this group to another group and change the level of credit increase for each unit. In a broader scale, if the credit institutions operate in a healthy and effective way, the State Bank will consider the possibility of easing the measures of credit control and vice versa.

- Would you say something about the results of implementing the Governmental Resolution 11 and the State Bank’s Instruction 01 concerning the request of credit institutions to bring the proportion of non-production outstanding credit to 22% on June 30 2011 and 16% on December 31, 2011?

Mr. Nguyen Dong Tien: As of the end of 2011, the non-production outstanding credit of the whole sector stood at 11.3%, but some units had surpassed the 16% level and the State Bank had given the warning to and taken control of them. In 2012, the State Bank will continue to control the proportion of outstanding credit in the non-recommended areas such as real estates, securities and consumption at the below 16% level.

In terms of the real estates loan, in the past, it was approximately 10%, but now the figure is below 9%. Especially in 2011, the speed of the outstanding credit growth in this area was reduced to 15% as requested by the Government and the State Bank will continue to maintain this reduction in 2012.

The solutions being deployed by the State Bank as mentioned above are the stabilization of macro economy and the provision of credit to production and business activities, the areas that will create more jobs and export; no priority will be given to the non-recommended areas such as securities and real estates. However, as far as the credit for real estate is concerned, the State Bank will adjust flexibly and allow the supply of credit to the project of building houses for low income earners and for workers in the industrial zones and to the housing construction projects which are to be completed and put to use in late 2012.

As for those units with the credit growth and outstanding credit in the non-recommended areas surpassing the provided level, the measure of doubling the Vietnam dong reserve will be taken.


- As far as the credit institutions in group 4 which will not be allowed to raise their credit are concerned, it is possible to create risks and break-up, so how has the State Bank foreseen this situation?

Mr. Nguyen Dong Tien:

This is the worry we can see, but they have been landed in the situation of failing to make any payment, being in danger of breaking up and in the process of restructure, so first of all they have to restructure the debts and recollect the old debts with the effective projects, without being allowed to raise the credit as compared to the previous year. In so doing, they will be still maintained and their assets will be restructured in the direction of safety and more quality.

At present there are about 10 credit institutions falling into the said classification. The bank governor has worked continuously with each group of credit institutions, particularly with the weak group. This is also the way for the State Bank to help the weak credit institutions and at the same time to avoid the state of “leveling” as in the previous year.

- The bank payment intensity is becoming the hottest issue of the economy, how does the State Bank treat it?

Mr. Nguyen Dong Tien: This is the huge task assigned by the Government to the State Bank. The Bank is pumping capital through OMO both in volume and term in a flexible way to meet the requirement of capital for the credit institutions, and when necessary, re-supply of capital is implemented.

In the time to come, to maintain liquidity, the State Bank requests the credit institutions to implement well the management of liquidity, observe satisfactorily the provisions of the State Bank and is held responsible for the system and the economy.

On the other hand, the State Bank will continue to take measures for flexible administration with the smooth pumping of money, the control of interest rate in conformity with the market development so as to be able to guarantee safe liquidity for the whole system in order to take the capital flow to investment and production./.