(Bloomberg) -- Vietnam ordered a rare inspection of the State Bank of Vietnam over its oversight of efforts to speed up loans to businesses, according to a local media report, as Prime Minister Pham Minh Chinh ramps up pressure on the central bank.
The inspectorate is launching the probe into the central bank’s handling of credit growth in 2022 and 2023, VietnamNet reported on Saturday, citing an instruction from the government office. The move was ordered by Deputy Prime Minister Le Minh Khai and a report is due next month, it said.
The inspection signals an escalation of pressure on the central bank to help accelerate growth, which has been hurt by the global slowdown, as well as the nation’s sputtering real estate market. Prime Minister Chinh has repeatedly leaned on the State Bank this year to ensure that lenders pass on the benefits of four rounds of reductions in policy rates. Last week, the premier called on the central bank to punish lenders imposing unrealistic loan terms.
According to VietnamNet, the central bank failed to come up with prompt solutions ordered by the government to reverse banks’ slow dispersals of loans to rejuvenate the economy. Businesses have struggled to get funds, while the regulator’s credit-growth targets for lenders have been neither timely nor effective, the website reported, citing parliament members.
Vietnam’s loan growth was 8.21% as of Nov. 22, compared with last year. That’s considerably less than the government’s 2023 target for 14% to 15%. At the same time, Vietnam’s economy expanded 4.24% in the first three quarters, below the trend seen over the past decade, apart from during the pandemic.
Chinh wants to quicken GDP growth to 6% to 6.5% in 2024 from an estimated 5% this year. The government has also sought to speed up criminal proceedings against real estate executives accused of misusing billions of dollars, with investigations that have upended local property and bond markets.
(Updates with details, context throughout)
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