HANOI, June 24 (Xinhua) -- The State Bank of Vietnam has decided to allow commercial banks to reschedule the debt repayment period and maintain the debt group for certain sectors for an additional six months, Vietnam News Agency reported Monday.
The decision will hold until the end of the year, rather than as previously agreed, expiring at the end of this month to support struggling businesses, said the central bank.
Tran Duc Thuc from Ho Chi Minh City University said bad debt would increase in 2024 when corporate bonds come to maturity. The sale of assets is also difficult, so firms do not have money to service debt or to pay bonds.
If banks are not allowed to extend the payment deadline of existing debts, the debts will be transferred to an even more poorly functioning debt group, he said.
The credit growth of the Vietnamese banking system increased 3.79 percent as of June 14 against the end of 2023, according to the central bank.
According to the Vietnamese government's targets, credit growth by the end of the second quarter of 2024 is set to reach 5-6 percent and 15-16 percent for the whole year. ■