Banks need effective application of risk assessment norms
VGP – The majority of Vietnam’s banks needs to apply more fruitfully the standards for evaluating environmental and social risks of businesses’ loans, the International Finance Corporation recommended.
The recommendation was released following a survey conducted by the international finance institution and the State Bank of Vietnam over business operation of 54 credit organizations in Vietnam last June.
Survey shows that most of these banks still lack of official policies, processes or systems to manage environmental and social risks of their customers due to poor awareness.
Other main obstacle to initiating policies on social and environmental risk is the lack of the sector’s specific guidance on environmental and social risk management in credit activities.
The adoption of compulsory instructions for risk evaluation is necessary in order to create an equal platform for all banks operating in Vietnam.
Mr. Simon Andrews, IMF Regional Manager in Vietnam, Cambodia, Laos and Thailand, said managing sustainable development of environment and social issues will bring new business opportunities to banks, such as support for energy saving and recycled energy.
By Huong Giang
