Interest rate on gold deposits to be capped, g12 banks to lower lending rate

The central bank is expected to cap the interest rate on gold deposits at 0.5% p.a. to limit gold hoarding, the local state-run online newspaper Tuoi Tre (“Youth”) reported.

The State Bank of Vietnam, the country’s central bank, held a meeting with 12 biggest commercial banks on Oct. 4 to address the local financial and banking issues.

The SBV intended to cap the interest rate on gold deposits at 0.5% p.a., pointing out that the gold interest rates at many banks surged to 2.3% per annum, even higher than the interest rate on USD deposits of 2% p.a., said managers of some G12 banks.

All 12 biggest banks agreed to keep deposit rates capped and reduce lending rates to 17-19%, easing from 18-22%.

The central bank is also expected to keep on injecting liquidity via OMO to support local banks.

Banks are currently not allowed to sell gold deposits, as regulated by Circular No. 22/2010/TT-NHNN dated October 29, 2010 of the SBV.

Source Sophie/ News Writer/ StoxPlus

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial, Vietnam interest rates

Posted by VBN on Oct 6 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