Real estate credit should not be over-controlled.

The Ho Chi Minh City Real Estate Association (HoREA) has just issued an official dispatch requesting amendments and supplements to Circular 06/2023/TT-NHNN (Circular 06) to implement the Prime Minister 's Official Dispatch 993, in the direction of not controlling the use of loans for the right purposes.

Too many problems

Accordingly, HoREA proposed to amend Circular 06 and Circular 10 in the direction of abolishing Clauses 8, 9 and 10, Article 8 of Circular 39/2016/TT-NHNN. Specifically, the State Bank of Vietnam (SBV) considered removing the phrase "controlling the use of loan capital for the right purpose" in Article 22 of Circular 39. Because in this content, the regulation that credit institutions are not allowed to lend for capital needs is not consistent with the provisions of the law on civil, investment, real estate business as well as not consistent with practice and has been suspended from implementation.

In addition, credit institutions are almost unable to fulfill their responsibility to have measures to check, monitor, and evaluate the financial situation and debt repayment sources of customers... Because the final user of the loan is the project investor, that is, the third party, not the customer who directly borrows this credit.

HoREA also recommended considering not requiring credit institutions to have measures to block the loan disbursement amount at the lending credit institution in cases of lending for payment purposes to ensure the performance of obligations.

At the same time, it is recommended that the State Bank consider providing guidance to commercial banks on how to understand and possibly apply and loosen lending conditions based on the need to consider amending and supplementing Article 7 of Circular 39 to support and create conditions for real estate project investors, commercial housing, home buyers, and investors to access credit more easily in the current difficult real estate market situation.

Real estate businesses face many difficulties in borrowing credit due to the regulations of Circular 06. Photo: HOANG TRIEU

The State Bank of Vietnam considers guiding credit institutions to implement a number of important solutions such as: For projects that have had a decision approving the investment policy at the same time as approving the investor, commercial banks can provide credit loans to investors to compensate for financial losses with the loan not exceeding 30% of the total investment of the project.

For projects that have a construction permit and have started construction, commercial banks can consider lending to investors to pay for and cover project implementation costs and business operations with the loan amount not exceeding 50% of the total investment of the project...

Mr. Le Hoang Chau, Chairman of HoREA, said that Circular 06 has a very special role and position, and is an unusual solution to handle unusual situations, so he suggested that the State Bank should direct credit institutions to continue implementing Circular 02/2023/TT-NHNN regulating credit institutions and foreign bank branches to restructure debt repayment terms and maintain debt groups to support customers facing difficulties for a certain period of time until the economy recovers and grows normally again.

Loan support should be considered.

According to Mr. Nguyen Hong Hai, Chairman of the Board of Directors and General Director of VNO Group, HoREA’s recommendations are completely reasonable. Currently, businesses themselves are facing many difficulties. Therefore, banks need to consider lowering conditions and providing loans so that they can revive their businesses. Because capital flows are related to the survival of businesses.

If the control is too tight, especially in unnecessary conditions, it will waste time, effort, and costs for businesses, as well as lose business opportunities. "Businesses are not afraid of high interest rates, but only fear difficult loan procedures, leading to sluggish projects and not knowing when they will die" - Mr. Hai said.

Regarding HoREA's proposal to amend the regulation that credit institutions must have measures to block the amount of loan disbursement at the lending credit institution in cases of lending for payment to ensure the performance of obligations, lawyer Truong Thanh Duc, Director of ANVI Law Firm, said that the provisions of Circular 06 are unclear.

"In this case, it must be understood that lending to contribute capital is not a case of lending to pay money to ensure the performance of obligations to block the loan. If the enterprise borrows money but cannot use the money, how can the capital recipient implement the project and fulfill its obligations to the capital contributor? The consequence is not only the failure of the economic transaction but also a chain reaction to many other economic and civil relations" - lawyer Duc stated his opinion.

Therefore, lawyer Truong Thanh Duc suggested that the State Bank should quickly clarify this incorrect understanding and implementation. Because if the regulation is understood like that, it means that there must be double collateral (for the bank to lend and release the disbursed amount) for the same loan. This is unreasonable, causing waste of resources, increasing costs, and even confusing businesses, especially when the tightening of both credit and bond channels in recent times is causing them difficulties.

Stabilizing investor confidence

According to Dr. Truong Van Phuoc, former acting Chairman of the National Financial Supervision Committee, with the comments of the business community on some contents of Circular 06/2023/TT-NHNN, it shows that the banking industry management agency should only indirectly regulate the business behavior of commercial banks through regulations on ensuring operational safety instead of issuing administrative regulations.

The top priority now is to research and promulgate a law on financial stability to legalize the importance of this issue as well as the responsibility of the state and entities for financial stability and macro-safety. Forming a state fund to intervene to ensure financial stability is also an effective tool to help handle systemic risks in a timely manner, helping to quickly limit the spread of risks and stabilize investor confidence.

T. Poetry

Source: https://nld.com.vn/thoi-su/khong-nen-kiem-soat-qua-muc-tin-dung-bat-dong-san-20231123212843094.htm