Therefore,
Monetary support absorbing banks fragile:
Vietnam State Bank
Monetary support for the absorbing banks of fragile establishments
Banks proceeding to the compulsory transfer of fragile banks will see their compulsory reserve rate reduced by 50% from 1is Next October. Therefore, according to a new circular from the State Bank of Vietnam (SBV).
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| Vietnam State Bank softens its monetary policy in favor of banks absorbing establishments in difficulty. |
| Photo : VNA/CVN |
This measure aims to encourage large banks to participate in the recovery of fragile establishments. while freeing up more margin of credit for the benefit monetary support absorbing banks fragile of the economy.
Thanks to this new policy. Vietcombank, MB, VPBANK and HDBANK will benefit from a preferential rate, because they have taken care of the compulsory transfer of banks in difficulty such as CB, Oceanbank, Donga Bank and GPBANK.
Concretely, these establishments will no longer have to constitute only a compulsory rate of reserves of 1.5% for deposits of less than 12 months and 0.5% for deposits of 12 months or more, against respectively 3% and 1% currently. This change will thus release considerable capital for these four banks.
As of June 30 this year, Vietcombank, MB, VPBANK and HDBANK displayed a total outstanding of loans of nearly 3.8 quadrillions of Dôngs, representing around 25% of all the credits of the Vietnamese economy.
According to Nguyên Thê Minh. director of the Research and Development Department for individuals of Yuanta Securities Vietnam Company, this reduction in compulsory reserves can be monetary support absorbing banks fragile considered as a relaxation of the monetary policy of the SBV.
However. he underlines that the SBV must set up a strict monitoring mechanism, inspired by the standards of “resistance tests” of Basel II and Basel III, in order to assess the performance of banks after acquisition and to avoid an increase in questionable claims.
VNA/CVN
Monetary support absorbing banks fragile
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