A bank teller counts money at a transaction office in Hanoi. (Photo: congthuong.vn) At a dialogue held by Vietnam Investment Review on March 11, expertssaid under the Law on Credit Institutions, which will take effect from July 1this year, banks must reduce the loan limit for a customer from 15% to 10%, andfor a customer and their related parties from 20% to 15% according to a roadmapfrom July 1, 2024 to January 1, 2029.
Dr. Pham Xuan Hoe, former Deputy Director of the State Bank ofVietnam (SBV)’s Institute of Banking Strategy, said at the dialogue that thenew regulation in the law will definitely affect enterprises.
According to Hoe, the capital of large and medium-sized banks iscurrently about 70-80 trillion VND and 35-50 trillion VND, respectively. Thus,if the credit limit is reduced to 10%, customers can borrow only about 5trillion VND, which is not enough for real estate, infrastructure and energyenterprises with huge capital demands. Therefore, projects with investmentcapital of more than 5 trillion VND must think about syndicated loans.
Besides, the credit limit regulation for a customer and theirrelated parties under the law also has a very broad meaning. For example, acorporation has many independent subsidiaries, or related parties, so thecredit limit of a bank for the corporation is also limited.
Therefore, Hoe said, to implement this regulation, the SBV needsto very clearly define the roles and tasks of State management agencies.Commercial banks also need to review very carefully, especially large customergroups, so as not to encounter difficulties when implementing the newregulation of the law.
He said the business culture of commercial banks needs to change,with an aim to enhance the cooperation to share both benefits and risks.
To lighten the impact of reducing the credit limit on enterprises,Nguyen Quoc Hung, General Secretary of the Vietnam Banks Association (VNBA),suggested that banks should cooperate to co-finance good projects.
A bank, whose customer has outstanding debt exceeding theregulated credit limit, needs to proactively invite other banks to participatein co-financing the customer’s projects, Hung said.
If the project is good, it is possible to ask other banks toco-finance it, Hung proposed.
In addition, syndicated loans with the participation of more thanone bank in managing and evaluating projects also help increase thetransparency and efficiency of the projects, he said.
Hung believed the five-year roadmap from 2024 to 2029 for banks toreduce credit limits is appropriate. He expected that banks will unite todeploy lending so that all people and enterprises can have access to bank loansand there need be no fear of lack of capital for large projects./.
VNA
