Only well-governed, efficient and law-abiding credit institutions will be allowed to open new branches and transaction offices, while those with poor governance and violations against safety regulations will not. The latter may even lose licenses, says the directive.

The directive also states that the banking authorities will aggressively adopt the solutions in the plan for bad debt settlement and the plan for establishment of Vietnam Asset Management Company in order to unfreeze the credit flow and improve capital use efficiency of the economy.

However, the directive informs the two plans have not been finished yet. The central bank is perfecting these plans for submission to the Politburo.

SBV will tighten bad debt supervision. It will continue to review bad debts, sort them by types of businesses and types of credit institutions, and evaluate collateral, assets, legal status, market prices and payment capability.

More inspections of banks will be launched, focusing on financial status, ownership, stake transfer, governance, foreign currency and gold trading, capital lending and mobilization, debt classification and risk provision. Fraud and dishonesty will be strictly handled.

Credit institutions, except for those having been or being restructured under the plans approved by SBV are asked to review their operations and sent their restructuring plans to the central bank no later than February 28.

As per Directive 01, SBV said it will apply a mechanism for gold trading to create and ensure smooth circulation in the gold market. It will continue to supervise and inspect licensed gold traders.

In this quarter, the central bank will join hands with the Ministry of Construction to compile and release a guideline for lending to buyers of low-cost houses and investors converting their projects into low-cost ones.

The Government will set aside a sum for refinancing with reasonable terms and interest rates in a bid to help banks give loans to low-cost house buyers and project owners changing their projects to low-cost ones, says the directive.