Lending interest rates really decline?

Experts expressed their concerned on whether local borrowers could really get access to low-cost funds even when domestic banks announced their decisions to cut lending interest rates further.

Experts expressed their concerned on whether local borrowers could really get access to low-cost funds even when domestic banks announced their decisions to cut lending interest rates further, the local online newspaper Saigon Dau Tu Tai Chinh reported.

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) on February 9 announced the bank’s policy to cut lending interest rates by 2% per annum.

Specifically, the lender lowered lending interest rates in the dong by 2% p.a. to 17% p.a. for short-term commercial and service loans, 16.5% p.a. for short-term production loans and 16% p.a. for short-term loans for exports.

However, Vietcombank still offered consumer loans at interest rate of 18% p.a. for short term, 18.5-19% p.a. for medium and long terms. The bank said it will lend to securities and real estate sectors at as high as 20% p.a. Besides, interest rate reduction will be applied for prioritized borrowers only.

Earlier, Bank for Investment and Development of Vietnam (BIDV) has lowered lending interest rates 5th times in a row since last September. Currently, the bank posted its lending rates ranging from 14.5% p.a. to 17.5% p.a.

However, Head of a BIDV’s transaction office said that the 14.5% p.a. interest rate will only be applicable for export businesses, agricultural production and rural development, and low-income people to purchase houses.

Yet, in order to enjoy favorable interest rates, borrowers must satisfy various conditions. As a result, a lot of prioritized customers still have to borrow at high rates.

Source Sophie/ StoxPlus

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

Posted by VBN on Feb 13 2012. 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