State Audit reveals wrongdoings in the banking system
A report from the State Audit of Vietnam has disclosed various wrongdoings of the banking system last year, including interest rates in the interbank market that were higher than those of the black market.
Interbank interest rates higher than those of the black market
Despite the efforts of the State Bank of Vietnam inflation in 2012 was higher than the NA's goal. Moreover, enterprises are still in need of capital and bad debts continue to mount.
Several credit institutions have violated regulations on refinancing services but have not been dealt with. For example, North Asia Bank and Great Trust Bank were found to have committed violations in the first nine months 2011, but the SBV only established a supervisor team in late November 2011.
SBV also showed lax management over the interbank market which resulted in ludicrously high interest rates.
Though the regulated annual rate was 14%, several transactions in October 2011 were recorded as having annual interest rates of up to 30%, while some transactions in November saw rates as high as 37.5%.
The report also pointed out that some banks have not followed proper procedures when giving loans, including the Bank for Investment and Development of Vietnam (BIDV) and Mekong Housing Bank (MHB). These two banks still incur high rate of bad debt; 2.96% at BIDV and 2.49% at MHB.
Vietnam Banks for Social Policies (VBSP) also did not follow proper lending procedures for disadvantaged people, and gave away benefits to the wrong customers.
The VBSP's capital for preferential lending activities requested by the state has also been widely criticised for its activities.