• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

VietMaz

Update Latest News from Vietnam

  • About Us
  • Disclaimers
  • DMCA
  • Submit your story
  • Privacy Policy
  • Contact Us
You are here: Home / State Bank warns of NPLs from transport projects

State Bank warns of NPLs from transport projects

November 14, 2019 by

 

The Bờ Đậu BOT toll station on National Highway 3 in the northern province of Thái Nguyên. — VNA/VNS Photo Việt Hùng

HÀ NỘI — The State Bank of Việt Nam (SBV) has said it would continue to direct credit institutions to strictly control credit in potentially-risky areas such as real estate and securities, especially Build-Operate-Transfer (BOT) and Build-Transfer (BT) transport projects.

This was part of the Central Bank’s report sent to the eighth session of the 14th National Assembly recently, which will be discussed by delegates.

In the report, the SBV said many BOT and BT projects had been completed but were generating less revenue than planned, causing non-performing loans (NPLs) of about VNĐ53 trillion (US$2.27 billion).

The SBV has repeatedly warned commercial banks about lending to BOT and BT transport projects due to the potential risks in this area. SBV data showed that in the first nine months of this year, credit growth reached 9.4 per cent compared with the same period last year, but loans for BOT and BT projects only increased by 1.85 per cent.

Economist Võ Trí Thành told Người Lao động (The Labourer) newspaper that the banking system’s credit resources for developing BOT and BT transport projects was not only important in Việt Nam but also in many other countries.

“The risks of providing loans for these projects have been spoken about for years due to the large amount of capital involved and the length of the loans. If investors are unable to balance capital it can easily lead to bad debts,” Thành said.

He said banks often mobilised short-term capital for medium and long-term loans. If the loan was too large, it could lead to risks, including liquidity shortages. That’s why the SBV had asked commercial banks to reduce medium and long-term loans to reduce risks.

In order to remove difficulties and facilitate the effective implementation of lending activities for BOT transport projects to serve economic development, the SBV has asked Prime Minister Nguyễn Xuân Phúc to continue directing ministries and branches to closely co-operate and actively support the banking industry.

The bank said that mechanisms and policies needed to be perfected to mobilise long-term capital resources, which were in line with the long-term capital needs of BOT and BT projects. It was essential to focus on handling problems related to toll collections and implementing cashless collection services.

“The SBV’s recommendations to the Government do not only aim to find solutions for credit BOT and BT transport projects, but also reduce NPLs and clean up the banking system,” Thành said.

“Some banks are already working to reduce the ratio of NPLs, so debt restructuring for some BOT and BT projects needs to completed quickly,” he added.

At a press conference to review the banking sector’s operations in the third quarter held in Hà Nội recently, Deputy Governor of the SBV Đào Minh Tú said the banking system would still support BOT projects according to their financial conditions and capabilities, ensuring safety and efficiency for credit institutions.

However, Tú said ministries and branches must also clarify policies related to BOT projects to prevent risks such as low revenue from toll collections, which directly affected investors who had taken out loans from commercial banks.

“In the long term, it is necessary to have a mechanism to develop capital resources for transport and avoid reliance on bank capital,” Tú said. — VNS

 

  • BUSINESS IN BRIEF 19/1
  • BUSINESS IN BRIEF 22/1
  • BUSINESS IN BRIEF 18/5
  • BUSINESS IN BRIEF 10/2

Filed Under: Viet Nam News private public partnership (PPP), Vietnam banking, Vietnam News, Politics, Business, Economy, Society, Life, Sports, Environment, Your Say, English Through the News, Magazine, vietnam war, current news, Vietnamese to english, tin viet nam, latest news toda, security state bank, turtle mountain state bank, bell state bank, victory state bank, kansas state bank, marion state bank, iowa nebraska state bank, iowa state bank, sabine state bank, summit state bank, wyoming state bank, state bank of india online banking, state bank of india net banking, state department travel warnings mexico, banking out of state, island state banking, ohio state banking, ny state banking commission, united states weather warnings, united states tornado warnings, transport project for school, vw transporter project, transportation project for school, transportation project management, transportation project manager job description, penn state project management certificate, state bank of india personal banking

Primary Sidebar

RSS Recent Stories

  • Central city urges pre-feasibility study on Lien Chieu port
  • Audit regulator announces inspection plans for 2020
  • France braces for holiday misery as pension strike persists
  • Tiny Oanh stands tall for Việt Nam at SEA Games
  • Mekong Delta’s main flower, ornamental plant growing district affected by saltwater in rivers
Copyright © 2019 VietMaz. Power by Wordpress.