The State Bank of Vietnam on May 12 issued Document 3128/NHNN-TD appointing eight commercial banks to pilot a credit product linking four entities involved in the real estate sector.
The eight nominated commercial banks are BIDV, Vietinbank, Vietcombank and Agribank, Mekong Housing Bank, Vietnam Construction Bank, Lien Viet Post Bank and Sai Gon-Hanoi Bank.
The credit link to be piloted—which involves investors, contractors, building material suppliers and banks—aims to tackle difficulties hampering the local property market.
It is hoped that it will help reduce building material inventories while creating favourable conditions for enterprises with overdue debts to renew their loans. Renewed loans would include capital to continue construction on unfinished projects to ensure construction quality and the scheduled progress, according to the central bank.
The credit link will also help banks to control money flow and ensure that the cash is not diverted for wrongful purposes.
The central bank said the quality of credit would be enhanced and bad debts would be reduced as a result.
The document allows for the reporting of problems arising during the pilot implementation to the SBV governor.
Nguyen Viet Manh, director of the central bank's Credit Department, said at a conference this month that credit links for investors, contractors, material suppliers and banks played an important role in removing problems facing the real estate market.
The credit link model was introduced, together with the credit package worth VND50 trillion (US$2.38 billion), by the Vietnam Construction Bank and the Thien Thanh Corporation.
Source : Nhan Dan Online/VNA