Specifically, HoREA proposed that the State Bank urgently consider extending Circular 08 by 1 year, which stipulates that credit institutions use a maximum of 30% of short-term mobilized capital for medium- and long-term lending. It should be applied from October 1, 2024 instead of October 1, 2023 to create conditions for credit institutions to reasonably use short-term mobilized capital for medium- and long-term lending. At the same time, it will improve the ability of businesses and people to access credit, without causing "risks" to the safety of the credit system.
In addition, to implement Resolution No. 33 of the Government on a number of solutions to remove obstacles and promote the safe, healthy and sustainable development of the real estate market, the State Bank is assigned to flexibly and synchronously manage monetary policy tools to meet the demand for credit capital flows to serve socio-economic development. Create conditions for businesses, home buyers and investors to quickly access credit capital sources...
According to HoREA, from October 1, 2023, Circular 08 stipulates that credit institutions and foreign bank branches are only allowed to use a maximum of 30% of short-term mobilized capital (mainly short-term savings deposits) for medium- and long-term lending instead of 34% as at present.
However, according to HoREA, the current context of our country's economy has changed very differently from the context when Circular 08 was issued in 2020 and is facing huge challenges, from the impact of "headwinds" that have adverse impacts on our country's socio-economy. Including the real estate sector due to objective, unexpected, and unpredictable factors at the time of Circular 08's issuance.
The economic context at the time the State Bank issued Circular 08 was when the Covid-19 pandemic began to spread to a number of countries and our country had basically controlled the epidemic in this early stage. However, from about the second half of 2020 onwards, the pandemic broke out globally, seriously affecting our country, the economy, including the real estate sector. Although our country had controlled the pandemic and reopened early in the third quarter of 2022. But then the Russia-Ukraine conflict occurred from around the end of the first quarter of 2022, becoming a geopolitical conflict leading to recession, high inflation, and disruption of the global supply chain.
Many projects are still covered up due to legal problems and cannot sell products.
In the current context, the economy and real estate market are still very difficult due to the impact of "headwinds", so there are businesses in many economic sectors that have narrowed down production and business, reducing or even eliminating the need for credit loans. As for many real estate businesses, there is still a need for credit loans but it is difficult to access credit. The main reason is that real estate projects are entangled in legal issues even though the investors have clean land. Meanwhile, commercial banks require businesses to have "investment policy approval at the same time as investor approval", must have a detailed plan at a scale of 1/500, even have a construction permit, the project must be feasible to be eligible for credit loans.
If commercial banks just consider "loosening up" a little bit for businesses to borrow credit "to compensate for finances" with investment projects that ensure feasibility or have collateral such as the project's pink book, it will help businesses overcome difficulties. At the same time, it will contribute to achieving the credit growth target of about 14% in 2023 because as of September 15, the State Bank said that the credit growth result had only reached nearly 12.6 million billion VND, an increase of only 5.56% compared to the end of 2022, and nearly 1 million billion VND could be pumped into the economy.
Therefore, HoREA proposes that the Prime Minister consider directing and requesting the State Bank to urgently consider amending and supplementing Circular 08 in the direction of extending the application period of the above regulation by 1 year to create conditions for credit institutions to reasonably use short-term mobilized capital for medium- and long-term lending.
Realizing the shortcomings of Circular 08, HoREA previously sent a document requesting the State Bank to consider extending by 12 months the time of application of the regulation that credit institutions use a maximum of 30% of short-term mobilized capital for medium and long-term loans, which should be applied from October 1, 2024, but the State Bank has not responded.
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