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The State Bank of Vietnam (SBV) has asked banks to cut interest rates on existing loans to 15% or below. It hopes it will ease pressure on struggling business.
At the same time, the central bank had to report a rise in non-performing loans from 4.14% in April to 4.47% in May as economic difficulties are preventing businesses from settling debts and getting new loans, local media reported.
The SBV said in a statement that 84% of non-performing loans were mortgage-based and the value of the mortgages was equivalent to 135% of the bad debts. Vietnamese banks had made provisions worth $3.2 billion by the end of May to deal with the bad debts, the statement added.
Separately, the SBV also said it was working on plans to restructure four domestic banks. It has already approved similar plans for two others