There Is Group Interest in the Banking System, SBV Governor Says

Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh admitted that there was group interest in the system of credit institutions, the local newswire reported.

Inspection results of 27 credit institutions showed that many lenders had been controlled by a group of shareholders who held key positions at these banks.

Outstanding loans to the group of shareholders accounted for a great proportion of total lending, sometimes up to 90%, the Governor said.

Particularly, lending to this group of shareholders is related to real estate, which drove bad debts to rise and commercial banks to suffer loss amid frozen property market.

The Governor attributed the issue to overheated development in the past time along with poor inspection and monitor activities.

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