The State Bank of Vietnam said it will stop applying one credit growth target for all banks next year, allowing stronger lenders to offer more loans than others.
Credit institutions will be divided into four groups and weaker banks will have to face greater credit growth restrictions, according to the plan announced at a conference in Hanoi Saturday.
The central bank is aiming for an overall credit growth of between 15 percent and 17 percent next year. The new plan did not say what criteria will be used to categorize banks. Around 20 banks in the country are facing liquidity problems or have been found violating credit regulations.
According to the central bank, a new ceiling may be imposed on lending interest rates next year to stabilize the market, together with a cap on deposit rates.
Central bank governor Nguyen Van Binh said loans expanded around 12.5 percent in 2011, compared to the average credit growth of 33.5 percent from 2001 to 2012. However, the economy still managed to grow 6 percent this year, which Binh said was a positive sign.
Binh criticized the banking system for widespread violations of the 14-percent limit on deposit interest rates, causing borrowing costs to surge and hurting businesses.
Speaking at Saturday's conference, Prime Minister Nguyen Tan Dung said the State Bank of Vietnam has to cut interest rates as inflation was easing.
He also ordered all banks to restructure their operations to become more efficient.
"Honestly I have been worried about collapses and liquidity risk over the past three years"¦ [Banks] should not cause worries, allowing the government to spend time on other important issues," news website VnExpress quoted Dung as saying at the conference.