Home » Banking & Finance » Banks in Vietnam lack social risk management

Almost aBanks in Vietnam lack social risk managementll of the banks operating in Vietnam have lackedofficial policies and systems to manage environmentaland social risks of their customers, according to a recentsurvey.

The survey was conducted in June at 54 creditorganisations operating in Vietnam by the InternationalFinancial Corporation (IFC) in Vietnam and the State Bankof Vietnam (SBV).

It showed that one of the main obstacles to initiatingpolicies on social and environmental risk is the lack of thesector’s specific guidance on environmental and socialrisk management in credit activities.

Almost all of the banks needed to apply better norms onenvironmental and social risk assessment forbusinesses’ loans to improve sustainability of projects, itsaid.

According to Simon Andrews, IMF Regional Manager inVietnam, Cambodia, Laos and Thailand, managingsustainable development of environment and socialissues will bring new business opportunities to banks, such as support for energy saving and recycled energy.

Cat Quang Duong from the SBV said that the central bank is willing to cooperate with the IFC to promote the sector’senvironmental and social risk management.

He said the survey indicated almost all banks are not aware of impacts from environmental and social risks on theirbusiness.

Cooperating with the SBV to improve environmental and social risk management in the banking sector is an activityin the IFC’s advisory services programme in order to promote sustainable growth in Vietnam.-VNA

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