Hanoi (VNS/VNA) - The State Bank of Vietnam(SBV) has asked for the control over real estate loans by credit institutionsto be enhanced, especially in areas showing signs of land price fever.

SBV Governor Le Minh Hung in a recent documentabout lending operations in 2019 asked its branches and banks to keep a closewatch on the developments of the real estate market and strictly monitor creditprovisions for this sector.

Any unusual market developments must be reportedto the central bank, Hung said.

At the same time, supervision over lending wouldbe enhanced, especially for property and consumer loans, to ensure safety andthat the loans were used for the intended purposes.

The order was issued amid land price feverreported in several localities, including Da Nang, Quang Nam and Van Don.

The central bank asked lenders to tighten loansfor the stock and real estate sectors in recent years, warning of bad debtsrisks.

Growth of credit for the real estate sector wasreported to slow to 8.56 percent in 2018 from 12.86 percent in 2016.

The central bank also asked credit institutionsto focus on supporting small and medium sized enterprises to access credit andencouraging environmentally-friendly businesses, asking that the expansion ofcredit must go along with quality.

In another move, the SBV recently made public adraft circular about limits and safety ratio for banks’ operation for comments,which proposed to apply a credit risk ratio of 150 percent for home purchasingloans worth more than 3 billion VND (126 million USD), three times higher thanthe current ratio.

This aims to limit loans for high-end realestate segment to ensure the sustainable development of the real estate marketand safety of the banking sector, according to the central bank.-VNS/VNA