Hanoi (VNS/VNA) -Many commercial banks are proposing the central bank to extend creditgrowth limits as they have nearly reached the allowed threshold.

Nguyen Duc Vinh, generaldirector of VPBank, said the bank’s credit growth had so far reached more than12 percent, compared with the 13 percent rate assigned by the State Bank of Vietnam(SBV) for the bank in the whole of 2020.

VPBank had nearly reached itscredit growth ceiling and was asking for an extension from the central bank,Vinh said, noting that VPBank’s outstanding loans had shifted to customers whowere less affected by the disease since the beginning of this year.

Similarly, TPBank alsoannounced at its annual general meeting of shareholders held recently that thebank’s credit rose by 11 percent by the end of April 2020, meaning it has only0.5 percent of credit growth left for the remaining months of the year asassigned by the central bank.

TPBank therefore expected thecentral bank to extend its credit growth to 15 percent this year.

Pham Doan Son, general directorof LienVietPostBank, said his bank always had to control the credit growth tofollow the SBV’s regulation. The bank must wait for a green light from the SBVto extend the credit room this year to decide whether or not to boost lendingas its bank’s credit growth was about 5 percent as of May, nearly half of thelevel assigned by SBV at the beginning of the year.

Banks explained this was thetime to restore business operations as the COVID-19 pandemic had been almostcontrolled in the country, but when nearly reaching the credit growth limit,banks could not promote lending.

They said the extension ofcredit threshold at this time was necessary in the context of positive fundingsources since people did not have any more effective and safer investmentchannels than depositing money at banks. However, deposit rates were on adownward trend. If there was no expansion of the credit growth limit, not onlybusinesses, but also the banking system and the entire economy, would facetrouble.

At present, exports were beingaffected by the pandemic, but the demand for investment and production of goodsin the country was still high, so the actual demand for credit was stillsignificant, banks said.

The SBV allocated credit growthlimit for all credit institutions at 10.1 percent, lower than the 13 percentset earlier in the year due to the impact of the pandemic.

According to experts, thoughbanks’ income from services has improved in recent years, 70-90 percent ofbanks’ profits still have come from credit activities, so it is understandablethat banks expected the SBV to extend the credit threshold.

Some experts argued that thecredit growth room should not be loosened as it might cause inflation toreturn. Besides, considering the figures of credit growth and the grossdomestic product (GDP) over the years, they said that high credit growthhad not been in parallel with economic growth. For example, credit growthreached 18.25 percent while economic growth reached 6.21 percent in 2016. Therates were 18.28 percent and 6.81 percent in 2017; 13.89 percent and 7.08 percentin 2018; and 13.65 percent and 7.02 percent in 2019.

However, some agreed with thebanks’ proposal to extend credit growth. Banking expert Nguyen Tri Hieu said hesupported the proposal as it was better to accept inflation risks in return formaintaining economic growth, especially in times when many economies, includingVietnam, were at risk of slowdown./.