VietNamNet Bridge – Commercial banks have reported the steady increase in the mobilized capital so far this year. Meanwhile, businesses keep complaining that they lack capital to maintain production and expand business scale.

A report showed that the mobilized capital of the whole banking system increased by 4.34 percent in the first quarter of 2013, while the outstanding loans increased by 0.67 percent only.

Nguyen The Tuy, from the National Assembly said at a recent meeting of the Economics Committee, that the branch of a state owned bank in Lang Son province had transferred VND1 trillion worth of mobilized capital to the headquarter because it cannot lend the sum of money in Lang Son.

The State Bank of Vietnam, in the report to the National Assembly’s Economics Committee, attributed the slow credit growth to the national economy’s low capability of “assimilating” the capital.

A lot of businessmen have admitted that they dare not borrow capital not because of the high interest rates, but because they are not sure if their products can be sold. A representative of the Hanoi Supermarket Association also said that the low values in the customers’ bills at the supermarkets in Hanoi showed the demand is very weak.

In the eyes of bankers, the businesses’ solvency has weakened when the majority of the assets mortgaged for the loans relate to the real estate, while the real estate market has been frozen for a long time.

Meanwhile, commercial banks now take precautions in the disbursement for fear about the bad debt ratio increase after the hot credit growth period of 30 percent.

The problem now is that the strong businesses, eligible for accessing bank loans, don’t intend to borrow more money because they tend to ease the reliance on borrowing. Meanwhile, the weak businesses which lack capital are not eligible for borrowing, even though they accept the high lending interest rates.

A question has been raised -- that where the bank deposits have gone, then? Bui Duc Thu from the National Assembly’s Finance & Budget Committee also said it’s necessary to clarify how the mobilized capital has been used.

The April’s report of the National Finance Supervision Council showed that banks still try to mobilize more capital, but not to lend more, but just to pay for the due deposits. This has been blamed on the high bad debt ratio of the banking system.

Nguyen Tri Hieu, a well-known banking expert, also said banks have to use the new money to pay back the old debts, which would badly affect the national economy, if the problem cannot be settled.

The report of the national finance supervision council also said that the mobilized capital have been poured into non-credit finance investments, including the government bonds.

The analysis coincides with the statistics from the Hanoi Stock Exchange that the total capital mobilized through the government bond issuance in 2012 reached VND167,589 billion, which was double the figure of the year before. Of this amount, 80 percent was sold to commercial banks.

Meanwhile, a well-known economist, who is the advisor to the State Bank of Vietnam, thinks that banks might have use the deposited money to buy gold to finalize the accounts to stop trading gold prior to June 30 as requested by the State Bank.

The State Bank reportedly has sold out more than 13 tons of gold at the auctions so far, while the main buyers were the commercial banks.

VNE