Business
SBV urged to deal with bad debts among commercial banks
  • By Bich Diep | dtinews.vn | August 01, 2012 04:10 PM

Prime Minister Nguyen Tan Dung requested the State Bank of Vietnam (SBV) to focus on dealing with bad debts among commercial banks and restructuring weak banks.

 
 PM Nguyen Tan Dung
The move is aimed to carry out the government’s commercial bank restructure planning. Banks are also asked to control interest rates and credit growth for economic development. The PM made the call at the regular cabinet meeting on July 31.

According to the PM, in the coming time, the government will take more drastic measures to solve over burdened inventories and bad debts among enterprises.

Lending interest rates for agricultural and rural development, support industries and small and medium-sized enterprises are at a current 11-13% per year. The rates for businesses range between 12% and 16% per annum.

Between January and July 20, nearly 40,000 new companies were licensed with total registered capital of VND247.2 trillion (USD11.7 billion), down 12.7% in total numbers and a 11.6% decline in capital value against the same period of last year.

To date, the country has licensed 663,800 firms, of which, only 468,600 are operational, accounting for 70%. In the first seven months of this year, more than 30,300 went bankrupt or halted operations, up 6.4% on-year.

During the seven-month period, the country generated 825,000 jobs, up 1.7% on-year.

However, Vietnam still faces some macro-economic challenges. Industrial production value dropped 45.5% on-year, and bad debts among commercial banks have tended to rise.

From now until the year-end, the government will concentrate on controlling inflation, economic stability and economic restructuring to raise local competitiveness.

Leave your comment on this story