Dong deposit rate to be lowered to below 14pct/yr: Governor

The dong deposit rate will be lowered to below 14% per year and the lending interest rate is expected to reduce to below 18% per year by the end of this year, Nguyen Hung, general director of Vietnam Prosperity Commercial Joint Stock Bank (VPBank) quoted the State Bank of Vietnam (SBV)’s governor as saying at the meeting with 12 large banks recently.
According to the roadmap, some commercial banks will immediately lower the lending interest rate for some prioritized borrowers in accordance with the central bank’s provisions.

Particularly, Bank for Investment and Development of Vietnam (Bidv), Bank for Agriculture and Rural Development (Argibank) and VPBank lowered the lending interest rate for some business and production sectors, health and education. The reduction of lending interest rate will depend on the decision and performance of each commercial bank.

Also according to Hung, lowering the lending interest rate at this moment, banks will be likely to suffer losses. But, with an expectation that all banks will together reduce the interest rates and can receive the central bank’s incentives on refinancing and other policies, they still agree to reduce the interest rates.

According to the statistics, Vietnam’s deposit rate is at the highest level amongst countries with the highest interest rates such as Urkraina (12.5%), Pakistan (9.8%) and India (9%). – Vietbiz24

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Sep 8 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry