Last update 3/10/2012 2:40:00 PM (GMT+7)

Credit quota scheme may prompt banks to wheel and deal

VietNamNet Bridge – The State Bank of Vietnam has allocated credit growth rate quotas to banks based on its classification – the reform which is believed to help make the market more transparent. However, a halfway measure may prompt banks to wheel and deal.

What has happened after the classification?

The banks belonging to the first and second groups, which are considered the best banks in Vietnam, have declared their credit growth rate quotas. The names of the other banks, belonging to the third and fourth groups, which are considered the worst banks, have also been exposed. The noteworthy thing is that the list of the third and fourth group banks includes foreign bank branches.

The bank grouping might have surprised many people, who could not imagine before that the first group banks include the names unfamiliar to them, such as Nam A Bank, Dai A Bank, Phuong Dong and Bao Viet Banks.

Right after the classification, a new war of scrambling for deposits among banks has been triggered. The classification has become a “weapon” that banks have been using to play nasty tricks on others. The banks try to persuade depositors to withdraw money from other banks, which are in the central bank’s “black list”, to deposit at their banks, threatening that depositors would lose money if leaving money at the “problematic banks”.

Regarding the lending, banks have been slow in implementing their business plans, because they had to wait for the quota allocation by the Sate Bank. Therefore, right after the classification, banks hurriedly announced their credit plans. BIDV, ACB announced the program to lend 100 million dollars to fund import and export activities. Vietcombank, VP Bank, MHB and Tien Phong Bank have also announced the credit programs worth ten billions of dong under which businesses can borrow money at low interest rates.

However, no one knows where the money has gone to. Meanwhile, the majority of businesses still complain that bank loans remain inaccessible to them. Other businesses can borrow money from banks, but at sky high interest rates of 22 percent.

BIDV is considered the first bank which announced the interest rate reduction programs and provided a lot of preferential credit packages. However, every time when the bank launches a new credit program, it does not declare the result of the previously run programs.

When asked about this, BIDV President Tran Bac Ha simply explained that the bank still had not updated information.

Among the commercial banks which announced the launching of preferential credit packages, there were the “bad banks” if referring to the central bank’s classification. This has surprised many people.

In principle, the fourth-group banks must collect debts if they want to provide credit. Meanwhile, it is not easy to collect debts at this moment, as businesses have bogged down in difficulties. Meanwhile, third-group banks can only have the credit growth rate of 8 percent – a very small figure if noting that their credit growth rates in the previous years were no less than 40 percent.

In theory, the bad banks, which do not have many opportunities to provide loans, will have to lend at high interest rates, because they need to make fat profits from the loans to offset the small credit quotas they have been granted.

Under the table quota trading?

Some commercial banks, which can obtain the high credit growth rates of 15 or 17 percent have revealed that they may not use up the quotas.

Nguyen Ngoc Bao, President of Agribank, which has the 17 percent quota, said that the bank only strives to obtain the credit growth rate of 10 percent this year.

Unlike Agribank, Vietinbank has affirmed that it would use up the quota of 17 percent, saying that it wants a higher quota.

As such, there are both the “supply” and the “demand” for credit quotas on the market. The banks, which do not use up their high quotas, may transfer the quotas to those banks which need quotas, for money.

Doanh Nhan