More commercial banks cut deposit, lending interest rates

More commercial banks cut deposit, lending interest rates

Many commercial banks are lowering both deposit and lending interest rates in anticipation of the central bank imposing a lending rate cap in the near future.

The Government and the State Bank of Viet Nam see low interest rates and a lending cap as a measure to ease credit access for enterprises.

Interest rates in the inter-bank market are also seeing a sharp decrease.

An employee of a commercial bank in HCM City who did not want to be named said that late November lending interest rates between banks decreased to 1.5 per cent for overnight and one week loans.

Meanwhile, rates on Government bonds, considered to lead the market, have also dropped to less than 10 per cent per year.

Faced with these changes, many commercial banks have launched big promotion programmes under which both lending and deposit interest rates are cut.

The Housing Development Commercial Joint Stock Bank (HDBank), for instance, is offering the lowest interest rate of 8.6 per cent per year for personal loans and 9 per cent per year for corporate loans.

In addition, HDBank also offers loans at just four per cent per year against collateral for customers to start or run a business, repair houses, buy cars and consumer goods.

The Viet Nam International Bank is offering loans at 9.9 per cent per year for the first three months for real estate projects and personal loans.

Meanwhile, Asia Commercial Bank (ACB) has decided to cut deposit rates in expectation of the lending cap that is predicted to be significantly lower than current rates.

Accordingly, the highest interest rates it offers, on deposits of 12-36 months, has been reduced from 13 per cent or more to 12 per cent per annum.

For deposits of 1 to 9 months, the interest rate is 8.8 per cent per annum, lower than the central bank's current cap of 9 per cent.

The Export-Import Commercial Joint Stock Bank (EximBank) has made a further cut in deposit interest rates, keeping it's the highest rate at 11.5 per cent per annum for 12-13 month deposits.

Eximbank applies an interest of 11per cent a year on deposits of 15 months or more.

Vu Viet Ngoan, chairman of the National Financial Supervision Commission, said that recent interest rate fluctuations in the market showed that a reduction in interest rates will surely occur soon.

The central bank's move to lower interest rates and impose a lending cap in ways that would not only aim to support enterprises but also curb inflation, Ngoan said.

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