Vietnam banks dodge deposit interest rate cap again

Several commercial banks have been advising customers to buy corporate bonds with 18-20% p.a. interest rates, as a way to dodge the 14% deposit rate cap set by the State Bank of Vietnam (SBV), the local online newspaper Saigon Tiep Thi reported.

Accordingly, local banks can mobilize funds from depositors at interest rates much higher than 14% p.a. without violating the central bank’s deposit interest rate ceiling, the newspaper said. Local lenders also committed to repurchase those bonds at a specified future date.

However, customers must deposit at least VND1 billion to be “eligible” to purchase the bonds.

Source Sophie/ StoxPlus

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Jan 3 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