State Bank of Vietnam building in Hanoi. Photo courtesy of Wikipedia.
Vietnam will intensify its multi-year efforts to clean up and overhaul its banking system – which has struggled over the years with non-performing loans (NPLs) – by pushing for bank mergers and forcing weaker banks into bankruptcy.
The State Bank of Vietnam, the nation’s central bank, said that it will increase measures to “drastically” deal with weaker institutions that have no chance of recovery, a statement on its official website said on Thursday.
The central bank “is putting its utmost efforts to quicken overhaul of banks,” the statement said.
Vietnam’s years-long effort to clean up its banking system is a cornerstone of the government’s drive to reignite economic growth.
Vietnam lenders have until the end of 2015 to cut their bad debt to below 3 percent of their total loans.
The nation is targeting gross domestic product (GDP) growth of 6.2 percent in 2015, from last year’s growth of 5.98 percent.
The World Bank is forecasting Vietnam’s GDP at 5.6 percent in 2015.
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