Banks become innovative in attracting new deposits

Many banks are managing to lure more depositors by offering attractive preferences on certain products.

The Sai Gon Thuong Tin Joint-Stock Commercial Bank (SCB) has adjusted its non-term deposit polices by increasing its overnight interest rate to 12 per cent per annum for individual depositors, and to 8 per cent for organisational depositors.

Following this trend are many other banks, including Viet A Joint-Stock Commercial Bank (VietAbank), Viet Nam Joint-Stock Commercial Bank, and Viet Nam Export–Import Joint-Stock Commercial Bank (Eximbank).

VietAbank’s daily deposit interest rate ranges between 13 and 13.8 per cent per year while Navibank’s non-term rate is 14 per cent per annum offered for deposits worth VND100 million or more.

At Eximbank, the overnight interest rate stands at 7 per cent per year while deposits with a term of 48 hours or two days have an interest rate of 8 per cent.

Many other banks including Orient Joint- Stock Commercial Bank (OCB) have launched promotion programmes under which a depositor would receive a gift with a value aligned with the individual’s account as well as the term of the deposit.

OCB also allows depositors to withdraw their money prior to the due date after one-third of their deposit term has been completed. They are not required to give back any gifts.

The chairman of one bank’s executive board said that small banks lost their competitive advantage after the State Bank of Viet Nam established a common pricing mechanism for bank capital mobilisation.

Many depositors at small banks have withdrawn money to deposit at large banks, particularly State-run banks, to ensure safety. This change has caused small banks’capital sources to fall sharply.

Small banks have been trying to promote one-day deposits as a way to prevent capital shortage.

Source VNS

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial