Under Direction No 01 issued by the SBV Governor Nguyen Van Binh, four credit institutions and bank groups are allocated credit growth rates from zero to 17 per cent this year.

Of this, commercial banks and credit institutions will be allocated growth based on the health of the organisation and their performance last year. Institutions will be classified into four groups based on SBV criteria, with well-performing lenders classed in group A and weaker lenders in group D.

Specifically, group A will be allocated the highest credit growth of 17 per cent for the year; group B, 15 per cent; group C, 8 per cent and group D, zero per cent.

After six months, the central bank will review such allocations and may adjust the growth rates to meet monetary policy goals.

However, the list of the four groups of banks and credit institutions has not been revealed yet.

Last year, the SBV issued a general rate of under 20 per cent for all banks.

On the same day, SBV Governor Binh also issued Document 674/NHNN-CSTT requiring banks and credit institutions to control their credit activities for 2012.

The State Bank requested that foreign banks' branches and credit institutions formulate their own plan and closely control credit growth for the whole year of 2012 (including an exchange rate adjustment factor) on the basis of this credit growth target announced by the SBV.

Based on the credit growth plan in 2012, credit institutions are required to develop and implement credit growth for every quarter, assigning the credit growth plan for each quarter, as well as the whole year, to their transaction offices while sending it to the SBV municipal and provincial branches for credit management.

Banks and credit institutions are set to send their reports on business targets of 2012 to the SBV Monetary Policy Department before February 29, 2012.

The SBV also defined that the total outstanding credit includes the credit in line with Item 14 of Article 4 of the Law on Credit Institutions and Circular No 21/2010/TT-NHNN dated August 10, 2010. This item also includes corporate bond purchasing balance (excluding bonds issued by credit institutions) and outstanding loans through entrusted funds from other non- credit institutions.

The central bank also requested that credit institutions and banks continue controlling their loans to discouraged sectors.

In particular, the proportion of loans made for discouraged sectors must be restrained at less than 16 per cent of each bank's total outstanding loans for 2012.

The discouraged fields include securities investment and trading, consumption and real estate projects.

However, several cases will still be given priority to accessing banks' loans, such as workers wanting to purchase shares from Initial Public Offerings of their equitising companies; house-owners wanting to repair or make mortgages on their monthly salary and constructions of apartments and houses for low-income families and workers in industrial, processing or economic zones.

In case credit institutions or banks make loans exceeding the credit growth rates of 16 per cent to discouraged sectors, they will be forced to make their reserves requirement ratio on Vietnamese dong doubled while other restrictions on their operations are applied, the SBV said.