Dong deposit rate touches 20pct/yr

The dong deposit interest rates jumped to about 17-18% for most terms, even up to 19-20% p.a., while lending interest rates mostly ranged between 18% p.a. and 22% p.a. and even hit 25-27% p.a., the state-run online newspaper VnEconomy cited data from a recent report of National Assembly (NA)’s Economic Committee at the 41th NA’s meeting.
Earlier, another Government’s report revealed that the average dong deposit interest rate is standing at 15.5% p.a., up 3% from the end of 2010; while lending interest rates are about 18.7% p.a., up 3.4% from the end of 2010.

Of which, lending interest rates for non-production sectors range between 22% p.a. and 25% p.a., while those for production are about 19.2% p.a.

Truong Thi Mai, Chairwoman of the NA’s Committee for Social Issues said the Economic Committee’s figures are likely more practical, although the Government only used the word “average” when mentioning about interest rates.

Also at the meeting, the NA’s Economic Committee warned about rising bad debts, credit risks and restricted capacity of the banking system.

The Government should adjust credit growth and investment capital disbursement from the state budget gradually throughout the year to avoid too much cashflow at the year-end peak season which may cause inflation to heat up.

A proposal to restructure the banking system to improve quality, efficiency and safety on the basis of the assessment and classification of commercial bank and credit institution system have also been mentioned in the regime resolution of the government. – Vietbiz24

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial