Banks signal end of deposit-rate war

Commercial banks have begun easing off one of the highest deposit interest rates they offer, trimming rates from the regulated maximum of 10.49 per cent per year.

“Banks are now tending to offer more reasonble interest on medium- and long-term deposits to reduce the pressure it puts on lending interest rates as well as to test market response,” said Asia Commercial Bank deputy director Nguyen Thanh Toai.

Yesterday, February 26, Asia Commercial bank reduced its highest rate to 10.37 per cent and began offering rates of 10.2-10.37 per cent on term deposits of one to six months.

Sacombank has reduced its maximum rate to 10.20 per cent while Eximbank, DongA Bank and Trust Bank, as well as some State-owned banks, have trimmed rates.

The lower interest rates indicated that banks were enjoying an improved access to capital, said the director of one HCM City bank who asked not to be named.

Since the central bank capped deposit interest rates late last year, many banks have offered the maximum rate for most terms along with cash bonuses and gifts, indicating a capital tension in the system.

The need to pay high interest on deposits also forced banks to charge higher interest on loans, peaking as high as 18-19 per cent in 2008.

“We should draw some lessons from 2008,” said the deputy director of a HCM City-based bank on condition of anonymity.

VietNamNet/Viet Nam News

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