SBV plans measures to bring lending interest rate down

In an attempt to bring the lending interest rate down to 17-19% per year, the State Bank of Vietnam (SBV) can carry out new measures such as capital injection or bond issuance, the local newswire Vnexpress quoted some commercial banks as saying at the meeting with the central bank on September 7.
The central bank on September 7 had a meeting with SBV’s branches in provinces and cities and commercial banks on measures to stabilize the market in the upcoming time, of which, reducing the lending interest rate to 17-19% per year was still the key matter.

At the meeting, some measures were given to realize the reduction of lending interest rate. Under which, the central bank can use 37 trillion dong surplus of compulsory reserve due to banks raised capital with high interest rate but they can not lend to ease the interest rates on the market.

At the same time, the central bank also can pump 15 trillion dong for 10 small banks. To be able to use this amount of capital, small banks must have collateral or this amount of capital will be the capital contribution of the central bank in these small banks.

According to a general director of a large commercial bank, this will be solution for SBV to stabilize the capital mobilization market and control the deposit rate cap.

In addition, the central bank also can issue bonds to attract capital from banks with good liquidity to refinance for other banks. At the same time, the compulsory reserve ratio may also be adjusted. – Vietbiz24

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Sep 9 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