The State Bank of Vietnam (SBV) on December 5 said that the credit growth rate limit has been raised by 1.5-2 percent for 2022, which means that about VND400 trillion more will be pumped into the national economy.

The SBV last week raised the 2022 credit growth target for the domestic banking system by 1.5-2 percentage points from its previous target of 14 per cent, allowing commercial banks to pump an additional VND240 trillion into the economy.

The increase in credit growth rate limit will help improve liquidity and provide working capital to Vietnamese businesses, but it won’t fully satisfy their need for capital.

The State Bank of Vietnam is attempting to stabilise lending rates while also mobilising credit institutions to continue reducing operating costs and support both individuals and businesses.

Four banks include VPBank, HDBank, MB and Vietcombank has just adjusted its credit room for the third time this year.

About 15 commercial banks have just been allowed to expand their credit limit by 1 percent to 4 percent by the State Bank, but this time expansion has not satisfied the market's thirst for capital after a long wait.

The State Bank of Vietnam (SBV) has said it has adjusted the credit growth rate limits of some commercial banks in 2022. As usual, the adjustments were not made public.

Credit expansion is good news, but not for the property sector, as banks have poured too much money into it, experts said.

The mechanism of granting credit room for each commercial bank is often called an administrative order by experts and it was proposed to remove this mechanism five to seven years ago after banks made new strides in the restructuring process.

Despite a credit slowdown in the first half of 2020, some private commercial banks have still asked the State Bank of Vietnam (SBV) for a credit growth expansion to prepare for a peak lending season expected at the end of the year.

As of May 29, Vietnam’s credit growth was only 1.96% compared with late 2019 under impacts of the Covid-19 pandemic, the Credit Department announced at a press conference held by the State Bank of Vietnam (SBV) Friday.

The State Bank of Vietnam has directed the banking sector to develop a VND250 trillion ($10.87 billion) credit support programme to help companies hit by the COVID-19 pandemic. 

A major proportion of bank loans are provided for the business community, particularly the private sector and individuals.

Businesses complain they find it difficult to access loans, while banks say many businesses don’t have feasible business plans and cannot use capital effectively.

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Commercial banks continue recruiting more officers, and though the average income decreased in 2012, bank officers still had sky high monthly salaries, which were the dream of the workers in other business fields.