Many people said that whether or not to publicise the results of credit ratings depends on the purpose of ranking.
According to the Circular 52/2018/ TT-NHNN issued by the State Bank of Vietnam, the SBV will rank all credit institutions and foreign bank branches instead of ranking only commercial joint stock banks as before and this will be done from April 1, 2019.
However, the results of credit ratings are only “circulated internally”, not publicly. This is not the first time that credit ranking results have not been publicised.
Previously, the Decision No. 06/2008/ QD-NHNN stipulating the classification of joint-stock commercial banks would publicise the official classification results for commercial joint stock banks on the central bank’s website. However, this regulation was also not followed.
In the opinion of the central bank, the ranking results of credit institutions are used to early warn, prevent the collapse risk of each credit institution as well as risks to the whole system, so that there is a timely management policy to protect the rights of depositors. “The central bank, the financial monitoring agency in many countries also do not publicly announce the ranking results of credit institutions such as domestic and international credit rating agencies which are performing periodically,” the SBV stressed.
Can Van Luc, BIDV’s chief economist also said that the results of credit ratings are particularly sensitive information and can only be used to serve the management objectives of the competent authorities. If being publicised, it would be very dangerous, possibly causing instability in the monetary market, as people would massively withdraw their deposits at credit institutions that are classified as “Weak”, causing the whole system collapse.
Associate Prof Dr Nguyen Khac Quoc Bao-Head of Financial Department of HCM City University of Economics once said that it is absolutely necessary to publish credit ranking results because otherwise, it will lead to a lot of consequences such as people will “carefree” choose high-interest banks to send their money with a belief that if something happens, there will be the State intervention, so there is no consideration between the risk and the interest rates.
Vu Dinh AnhFinance expert said that the results of credit rating are announced or not depending on the purpose of the ranking. If the ratings help people to choose for saving, or help investors assess more accurately the situation of credit institutions before “pour money” for investment, then the results of rankings should be publicised. If the ranking is only for the purpose of State management, it should not be publicised. “For people and investors there are many other channels to consult and assess the” health “of credit institutions before making decisions to deposit or invest,” Anh said.
Also, people and investors can fully know the “health” status of credit institutions through many other means such as financial reports and media, but Nguyen Tri HieuFinancial and banking expert recommended, the government and the SBV should encourage the establishment of reputable independent credit rating companies. The information provided by these units may be public, or be purchased in the financial market as in many other countries.
