Banks vow lower interest rates

Commercial banks have committed to continue adjusting their interest rates next month to ensure that the lending interest rate will stand at 12 per cent per annum and deposit rates at 10 per cent.

The banks made the commitment at a meeting last Friday in Ha Noi with Governor Nguyen Van Giau of the State Bank of Viet Nam.

Participants in the event were five general directors of the State-run commercial banks and representatives of some major commercial joint-stock banks, namely the Asia Commercial Joint Stock Bank (ACB), the Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), the Export-Import Commercial Joint Stock Bank (Eximbank), the Viet Nam Commercial Commercial Joint Stock Bank for Industry and Trade (VietinBank), and the Military Commercial Joint Stock Bank (MB).

All the bank leaders said that interest rate cuts were needed for credit institutions to effectively use mobilised capital sources and make higher profits.

They said assistance from the Government and a consensus among the banks would help them cut interest rates in early July.

Most commercial banks in recent months have made efforts to reduce interest rates on loans.

Top priority has been given to individuals and enterprises involved in industries suggested by the Government. They include companies involved in agriculture and rural production, exporters, and small-and medium-sized enterprises.

The Joint-Stock Commercial Bank for Foreign Trade of Viet Nam and the Bank for Investment and Development of Viet Nam offered priority cases of interest rates of only 12 per cent per annum.

The 12.5-per-cent rate was applied by the Agriculture and Rural Development Bank and the Mekong Housing Development Bank. Other commercial joint stock banks have used 13 per cent per year.

Based on these results, the bank leaders agreed to a new interest rate cut plan under which major commercial banks would immediately cut interest rates of loans in Vietnamese dong to 12 or 12.5 per cent per year for priority areas.

Other commercial banks would have to try to realise this target in a short time.

In regard to deposit interest rates, bank leaders have committed to make interest cuts within three months, from the current 11.5 per cent per year to 11 per cent immediately, and to 10.2 or 10.5 per cent by late September.

Governor Giau said the central bank would continue to carry out measures, mostly monetary tools, to actively regulate market interest rates so they would fall.

He asked commercial banks not to hand out bonuses and other gifts that could increase interest rates, and to ensure a consensus among banks. — VNS

Tags: Vietnam finacial, Vietnam finance, Vietnam interest rates