Vietnam - Ministry backs plan to set up construction bank

The Ministry of Construction has asked the State Bank of Vietnam to consider the Vietnam Real Estate Association (VNREA)’s plan to set up a construction bank.

The ministry says the establishment of such a bank will facilitate national housing development programs such as houses for the poor, students, low-income earners in urban areas, and construction material production programs.

In addition, the bank will serve as a good capital mobilization channel for the property market. It is an appropriate model considering the current socio-economic development situation of the country and the development trend of construction banks in other nations, according to the ministry.

At a recent conference on orientations and tasks in 2012 of the Central Steering Committee for Housing Policy and Real Estate Market, Deputy Prime Minister Hoang Trung Hai said there had not been any channel for long-term capital mobilization, so the banking system had to shoulder the entire long-term capital source for the property sector.

Therefore, the realty market was in need of a new capital mobilization channel to help relieve the burden on the banking system.

Deputy Minister of Construction Nguyen Tran Nam told the conference that the capital for the property sector mobilized from banks was heavily affected by the monetary policy.

Hence, the major task of 2012 is to resolve the capital issue, which is considered to be the key problem for property firms, so that enterprises could continue their projects and improve the market.

The plan to establish the Vietnam Construction Bank was submitted by VNREA to the construction ministry on January 17 this year.

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