The State Bank of Vietnam issued guidelines related to the government’s policy of four percent loan subsidies on Mar. 3.

Viet Tien Garment Company workers make clothes for export. Vietnamese companies are getting soft loans from banks to deal with current difficulties. (Photo: SGGP)

The Central Bank requested commercial banks to closely monitor loan subsidies that have been offered to customers to make sure that they will use the loans for correct purposes, in accordance with the policy.

Commercial banks are asked to direct their branches to conduct regular reviews.

Banks and their branches are also requested to cease lending immediately if they discover that the borrower has used the loan for illegal purposes and seek profits.

Banks must report cases of fraudulent use to the Central Bank with violators facing stiff disciplinary measures.

According to the guidelines, apart from exporters, other borrowers entitled to loan subsidies include: farmers growing rice for 2009 crops, businesses that need to purchase raw or other materials for production through deferred payments and businesses in export processing zones and duty-free areas, which need to borrow money to invest in local production.

According the Central Bank, after one month of loan subsidies, 85 commercial banks throughout the country have loaned over VND93 trillion ($5.3 billion) of which, state-owned commercial banks have given out subsidies totaling VND72.63 trillion (US$4.1 billion) , private commercial banks VND18.9 trillion (US$1.08 billion), and branches of foreign banks in Vietnam and joint venture banks VND1.5 trillion (US$85.8 million)