Banks raise gold deposit rate to avoid money withdrawal

Deputy general director of Hochiminh City Development Commercial Joint Stock Bank (HDBank), said that in the last three weeks, over one trillion dong has been withdrawn from his bank.
The balance of the bank’s gold deposit has increased significantly.

Bui Tan Tai, deputy general director of Asia Commercial Joint Stock Bank (ACB), said that along with a huge amount of capital being withdrawn from ACB, many depositors are now switching to US dollar and gold channels.

After remaining the gold deposit interest rate unchanged for three months, ACB raised the interest rate on certificate of gold deposit in almost terms whereby the highest interest rate is 1.3 percent per annum for 11 month term (previously it was 1.1 percent p.a.).

HDBank recently also adjusted up the interest rate on certificate of short term deposit in gold for 364 day term to 2 percent p.a.

The move is said to be measure to keep money at banks when many depositors are withdrawing money to invest in gold.

According to a deputy general director of a HCM City-based bank, currently his bank has nearly 70 percent of depositors with deposit worth from 500 million dong to five billion dong. When due, many of them asked to withdraw whole money from bank.

He said that the urgent method to woo customers is applying the daily saving interest rate at 14 percent per year, the overnight interest rate at 12-13 percent p.a. and customers can withdraw capital at anytime.

In a bid to support the liquidity for banks, after maintaining the 7-day term on open market operations (OMO) for five consecutive months, the State Bank of Vietnam (SBV) has recently extended the term to 14 days and made a net injection of over four trillion dong in last week on OMO.

From early September so far, the central bank made a net injection of 22 trillion dong on OMO.

However, according to several banks, they are not facing difficulties in liquidity. But the recent moves are to maintain their market share. – Source: Vietbiz24.com

Tags: vietnam gold, Vietnam gold market, Vietnam gold prices

Posted by VBN on Sep 28 2011. Filed under Banking-Finance, Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry