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Vietnam to investigate its central bank's handling of credit growth

Vietnam to investigate its central bank's handling of credit growth

Sunday, December 03, 2023, 10:53 GMT+7
Vietnam to investigate its central bank's handling of credit growth
Vietnam's government will investigate the central bank's handling of credit growth. Photo: Tu Trung / Tuoi Tre

Vietnam's government will investigate the central bank's handling of credit growth, the Ministry of Industry and Trade said on Saturday, after the government complained that credit was growing too slowly.

Deputy Prime Minster Le Minh Khai has asked the Government Inspectorate to conduct the investigation, the ministry said in a news release.

The State Bank of Vietnam (SBV) did not immediately respond to a request for comment.

Vietnam's economic growth largely relies on credit growth managed by the central bank, which sets annual targets for banks, with the aim of controlling lending and managing growth.

The SBV, which targeted 14% credit growth for the banking system this year, said on Thursday lending was up only 8.21% as of Nov. 22 from the end of last year and credit growth were uneven among banks.

Khai told the SBV in a meeting this week that credit growth had been too low, instructing the central bank to review the lending activities of each commercial bank, another government statement said.

The SBV said credit growth was low because "the economy was still facing difficulties with a slow economic recovery and therefore the demand for loans was weak," according to the statement.

An SBV official has also been embroiled in a financial scandal that police said entailed fraud of more than $12 billion, or 3.2% of the economy.

Truong My Lan, chairwoman of real estate developer Van Thinh Phat Holdings Group, and her accomplices embezzled 304 trillion dong ($12.5 billion) from Saigon Joint Stock Commercial Bank, according to the investigation, which found that a senior SBV official took a multi-million dollar bribe from Lan to ignore its wrongdoings.

Reuters

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