HANOI, Feb 3 (Reuters) - Vietnam's central bank has raised the limit on bank loans to stock investors in a move that will boost lending for some banks but not encourage excessive credit growth in the country.
The directive, part of efforts to improve Vietnam's capital market, will mean different things to banks depending on their total loans and registered capital level.
Banks with bad debts of a maximum 5 percent of loans can now lend a maximum 20 percent of their registered capital to stock investors, replacing the current limit on 3 percent of total loans.
"With this regulation, lending for securities investment would not lift the overall credit too much, and many banks with a low level of loans against their registered capital can lend further," the central bank said in a statement on Saturday.
Banks which increased their registered capital significantly last year while their loans did not pick up can lend more in line with the new limit, while larger banks with high but stable capital may have to cut their loans, brokers said.
The central bank has said it aims to limit the country's credit growth at 30 percent this year after a jump of 37.8 percent last year.
Loans for securities investment totalled 11.4 trillion dong ($714 million) in December 2007, or 1.37 percent of total bank loans, central bank's figures show.
Market regulators say they want to raise Vietnam's stock market value to between 50 percent and 60 percent of gross domestic product this year from 43.4 percent in 2007. The economy grew 8.5 percent to $71 billion last year.
($1=15,965 Dong) (Reporting by Ho Binh Minh, editing by Jacqueline Wong)
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