HANOI, Feb. 18 (Xinhua) -- The State Bank of Vietnam, the country's central bank, is planning to halve reserve requirement ratios for credit institutions for the first time since 2011.
The central bank will halve the compulsory ratio for credit institutions that take part in its plans to support the restructuring of ailing credit institutions, local daily newspaper Vietnam News reported on Monday.
Beneficiaries of the policy include such big commercial banks as Vietcombank, VietinBank and BIDV which have helped the revival of CB Bank, Ocean Bank and GP Bank, respectively.
Currently, credit institutions are asked to maintain reserve at 3 percent of the total deposit in Vietnamese dong for below 12-month term, and at 1 percent for 12-month-plus term. The ratios for foreign currency deposits are 8 percent and 6 percent, respectively.
According to local experts, the policy will help increase lending capacity of credit institutions, but may cause difficulties for the central bank in controlling the banking system's liquidity and inflation.
Total loans of Vietnam's banking system grew 14 percent in 2018, falling short of the target 17 percent. The central bank has set the 2019 credit growth target at about 14 percent.
