Banking in 2014: bank officials arrested, interest rates slashed
Banking in 2014: bank officials arrested, interest rates slashed
The year 2014 proved to be an unlucky year for bankers with many of the “big guys” suffering hard knocks during this period.
In mid-December 2014, the Court of Appeals rejected an appeal by Nguyen Duc Kien, dubbed as “mogul Kien”, the co-founder of Hanoi Stock Exchange-listed Asia Commercial Bank (ACB), confirming the judgment of the 30-year imprisonment by the Sheriff’s Court.
Meanwhile, the Court of Appeals held a hearing for Huynh Thi Huyen Nhu, a former VietinBank worker, who was charged with embezzling VND4 trillion and falsifying documents. The court of first instance announced life-sentence imprisonment for the woman.
The Court of Appeals also held up the eight-year imprisonment sentence for ACB’s deputy general director Ly Xuan Hai, and the four-year and three-year imprisonment for former deputy chairs Trinh Kim Quang and Pham Trung Cang, respectively.
ACB’s former deputy chair Le Vu Ky was the luckiest after having his sentence reduced to four years in prison.
The year also witnessed the arrest of many bankers. Ha Van Tham, former deputy chair of Ocean Bank, in late October 2014 was put into temporary custody for four months during an investigation.
Tham was prosecuted in accordance with Article No 179 of the Criminal Code for violations of the regulations on providing credit.
Prior to that, in late July 2014, the police arrested Pham Cong Danh, former chair of the Vietnam Construction Bank (VNCB), Mai Huu Khuong, a member of the bank’s board of directors and Phan Thanh Mai, former CEO of the bank, for “deliberately violating the regulations and causing serious consequences” and “violating the regulations in providing credit”.
The three faces are also managers of Thien Thanh Group, a big player in the real estate market.
Analysts commented that the list of the bankers arrested for their financial fraud would be prolonged as the State Bank of Vietnam is enhancing the banking sector restructuring process.
Loan interest rates fall
The success in regulating bank interest rates is believed to be the greatest achievement of the banking sector in 2014.
After many adjustments, the ceiling dong deposit interest rate has dropped sharply to 5.5 percent per annum, applied to 1-6-month term deposits.
As for dollar deposits, the highest possible interest rate institutional depositors can enjoy is 0.25 percent per annum, while individual depositors are entitled to 0.75 percent.
The sharp fall of the deposit interest rate has paved the way for the lending interest rates to drop. Commercial banks now lend at 7-9 percent per annum to ordinary clients who want short-term loans and 9.5-11 percent for long-term loans.
