Vietnam Development Bank's bad debts rise to $1.07 billion

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Bad debts at the state-owned Vietnam Development Bank (VDB) have grown to VND22.664 trillion (US$1.07 billion), due to various violations, according to the government inspectors.

It was estimated that the bad debts accounted for 12.57 percent of the loans of the bank, which raises funds for government projects, as of December 31, 2010, inspectors told a Thursday press conference on its findings from investigations during the last quarter of 2012.

While more than VND6 trillion of the bad debts were assigned to government programs as ordered and nearly VND3.8 trillion was lent to the debt-ridden Vietnam Shipbuilding Industry Group, numerous violations have been detected in the bank's loan records, they said.

Approving loans for unsuited applicants, and inaccurate estimates of mortgaged assets before approving loans were among VDB's wrongdoings, they cited.

Moreover, up to 38 customers of the bank used loans, nearly VND7.4 trillion, for purposes different from those stated in their loan agreements, they added.

Violations were also found in 35 shipbuilding projects with loans totaling some VND2.5 trillion as of June 30, 2011, inspectors said, adding that it was very likely that the bank would lose all the funds from these loans.

According to inspectors, they have proposed that Prime Minister Nguyen Tan Dung order the Finance Ministry and the State Bank of Vietnam to identify which individuals were responsible for the violations at Vietnam Development Bank, and punish them.

They said the investigation at VDB was among 52 inspections that they launched last year, of which 11 have been completed.

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In the first quarter of 2013, they will inspect the state bank's management of the gold market and the State Securities Commission of Vietnam's management of the securities sector.

Ngo Van Khanh, deputy chief of the government inspectorate, said they are considering inspecting "hot" issues in the sectors like gold imports and the monopoly over gold bullion.

The inspections will be the biggest and most complete to ever be conducted in the sectors of gold and securities, he emphasized.

Inspections will also be launched this year into the state bank's management of the gold trade, the Ministry of Industry and Trade's oversight of imports and exports, the Vietnam Rubber Group, and the Vietnam National Petroleum Group (Petrolimex).

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