State Bank expands credit room in 2024

(CPV) - The State Bank of Vietnam (SBV) has just issued a notice to adjust and increase the credit growth target (credit room) for credit institutions (CIs) in 2024. This is a move to ensure capital sources to meet economic development needs and support production and business in the context of well-controlled inflation.

Illustration photo (Photo: MP)

According to the State Bank, the credit limit increase is carried out in accordance with the principles of publicity and transparency, ensuring efficiency in credit capital allocation. Notably, this adjustment is proactively implemented by the State Bank, without requiring credit institutions to submit a request. However, the State Bank does not announce in detail the specific conditions for deciding on the room expansion level for each credit institution, but only announces the implementation based on appropriate criteria.

This is not the first time the SBV has applied a proactive credit room expansion plan. At the beginning of 2024, the SBV assigned all credit growth targets to credit institutions according to the plan. On August 28, the SBV announced that it would consider expanding the room for credit institutions with a credit growth rate of 80% or more of the target assigned at the beginning of the year. This decision was made based on the ranking score of each institution.

This room expansion continues to reflect the SBV's goal of flexible and timely credit growth management, in line with the direction of the Government and the Prime Minister . This policy ensures that credit flows are allocated effectively, meeting the capital needs of production and business sectors and priority areas, while supporting sustainable economic growth.

As of November 22, 2024, credit in the entire banking system increased by 11.12% compared to the end of 2023, higher than the 10.08% increase recorded at the end of October. This credit growth rate is assessed as appropriate in the context of a stable macro economy and inflation controlled below the target set by the National Assembly .

Along with the expansion of credit room, the State Bank of Vietnam requires credit institutions to implement solutions to improve the efficiency of credit operations. Credit institutions must ensure safe credit growth, focusing on priority areas such as production and business, export, agriculture, industry and other dynamic economic sectors. At the same time, it is necessary to strictly control credit in potentially risky areas such as real estate, securities or non-essential consumer sectors.

The State Bank also emphasized the need to remove difficulties in accessing loans for businesses and individuals, especially small and medium enterprises. Banks are required to maintain stable deposit interest rates, while making efforts to reduce lending rates through cutting operating costs, reforming administrative procedures, applying information technology and digital transformation.

The State Bank of Vietnam affirmed that it will continue to closely follow domestic and international economic developments, ensuring proactive management of monetary policy. Liquidity support measures will be implemented promptly, creating conditions for credit institutions to have sufficient resources to supply credit to the economy.

In the coming time, the State Bank is committed to maintaining the stability of the monetary market, and is ready to implement monetary policy management solutions appropriate to the actual situation. This policy aims to balance inflation control and economic growth support, ensuring the stability of the financial system.

This credit room adjustment once again affirms the role of the State Bank in flexibly and effectively operating the national credit system, actively supporting business activities, production and economic development.

Source: https://dangcongsan.vn/kinh-te/ngan-hang-nha-nuoc-noi-room-tin-dung-nam-2024-684786.html