Commercial banks allowed to expand the line of credit | Bank and finance

Commercial banks are allowed to expand their line of credit

Recently, based on the application of commercial banks and the State Bank (SBV) ranking score through factors such as reduction of interest rates on loans to support businesses and people, credit restructuring in potential risk areas, participation in supporting the treatment of weak credit financial institutions, commercial banks have just been granted an additional line of credit of 1 to 4%.

Among them, public commercial banks have a specific increase. Specifically, Agribank was allowed to increase by 3.5% (equivalent to VND50 trillion) while Vietcombank was allowed to increase by 2.7% (approximately VND26 trillion) and VietinBank and BIDV were allowed to extend their margin by nearly VND 20 trillion in total respectively and MB by 3.2% (or VND 12 trillion).

Other commercial banks are increased by about 1% to 3%, which equates to a credit level of more than VND 10 trillion for commercial banks with medium and large credit scales, while commercial banks with small scales of credit are increased from 1,000 to 3,000 VND. billion.

In the first eight months of 2022, credit growth reached 9.91%. With a credit growth target of 14%, in the last four months of the year, approximately VND 457 trillion is expected to be allocated to commercial banks. Many economic experts expect this additional margin in part to help companies access credit after a long thirst for capital. However, the remaining level of credit is seen as difficult to meet all capital needs as businesses prepare for the peak trading season at the end of the year.

In fact, after several days of easing the credit room, few companies have been disbursed, even though the loan application was completed a few months ago. Many commercial banks said they had not yet received new loan applications, but were only focused on settling signed but undisbursed contracts.

For example, a director of a private oil company said that BIDV had additionally paid him VND 2 billion – the amount he had been cut off by the bank two months before the expiry date of the contract because the bank did not didn’t have a line of credit. He revealed that interest rates are up about 0.5% now, but all is well as long as he has received capital for his business.

However, due to the volatility in the domestic oil trade, he requested an additional loan of VND 3 billion, but the bank said this was not resolved as it was focused on disbursing funds for businesses. who had already signed commitments. Many oil industry businessmen also said that they had made loan documents from other banks such as HDBank, VIB who did not pay the grant to them because these banks were processing the documents in order.

Not only are businesses waiting for capital, but many people who borrow money to buy homes also struggle. For example, a resident of Thu Duc city said that four months ago she applied for a loan from a state-owned commercial bank with a prime first-year interest rate of 8.7 percent. per year, but the bank had not disbursed it. because the bank no longer had a line of credit. After the bank was allowed to loosen the coin, she asked, the bank said the interest rate for buying a house was 12% per year, for the first two years. , the loan was 9.5% per annum. However, the bank must examine it before replying to it because the credit space is not very extensive.

Experts said that in the last round of granting credit, the regulator may not have used the 14% annual growth margin and the State Bank may allocate it in phases in the near future. coming. Most commercial banks that have benefited from capital increases said they would prioritize capital lending to priority areas and critical industries of the economy.

Vietcombank executives informed that in order to be extended from 2.7% of credit balance to a maximum of 17.7% by the end of 2022, Vietcombank must be rated A (good) by the Bank of India. ‘State. Accordingly, with approximately VND 26 trillion in loans by the end of the year, Vietcombank will continue to control credit and prioritize growth in key sectors and industries of the economy, priority areas of the government. in order to properly control liquidity and credit risk and to ensure a low level of bad debts.

As the private commercial bank with the largest increase in rooms this time with 4%, bringing the total credit growth limit for the whole year to 11%, by the end of the year, Sacombank has about another 15 trillion VND to lend. An executive of another commercial bank said that this bank was allowed to increase its credit by more than 3%, adding that the demand for capital for production and business at the end of the year is usually very high, not to mention the demand for consumer capital which is also increasing. ; therefore, the level of newly allocated credit is difficult to meet capital needs in the market.

He announced that if the bank cannot extend its line of credit further, it must also resolve overdue debts to expand the line of credit and re-screen new lenders. At the same time, the bank will promote more services, cross-selling products and insurance business to increase non-interest income.

Many smaller commercial banks that have not yet been allowed to increase their capital during this phase have said they will adjust the current loan portfolio and reduce outstanding loans, with some large corporate clients borrowing at rates of low interest to upgrade to higher interest personal loans. rates to ensure set profit targets.

By Nhung Nguyen – Translated by Anh Quan

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