Credit institutions ordered to heed regulations on deposit rate hike
Credit institutions ordered to heed regulations on deposit rate hike
The State Bank of Vietnam (SBV) has asked credit institutions to follow regulations on the deposit rate hike or risk heavy penalties.
The announcement was made after some local credit institutions and branches of foreign banks recently increased their deposit rates sharply for some tenors in Vietnamese dong, offered multiple promotional programs and issued certificates of deposit at high interest rates to attract customers, news site Vietnamplus reported.
For example, Viet Capital Bank has issued certificates of deposit with the highest interest rate reaching 10.2% per year. Viet A Bank has also offered an annual interest rate of 9.1% for 24-month certificates of deposit with a minimum amount of VND10 million, Thanh Nien Online newspaper reported.
Meanwhile, Vietnam International Bank has also launched 61-month certificates of deposit with an annual interest rate of 9.1%.
These actions undermine the stability and sustainable development of the banking system and may lead to a race to hike deposit rates among credit institutions, causing volatility in the monetary market.
To ensure the stability of the monetary market, the central bank has ordered local credit institutions and branches of foreign banks to strictly follow SBV’s Directive 01/CT-NHNN on the main tasks of the banking sector this year.
Specifically, credit institutions must ensure the stability of their deposit rates, adopt solutions to improve their business performance and ensure the safety of banking activities, control their credit growth in line with their risk management and capital mobilization ability and enhance their control over credit for risky sectors.
SBV also asked credit institutions to regularly review their capital mobilization policies and promptly detect and handle violations.
The central bank will supervise the deployment of solutions to ensure the deposit rate stability of credit institutions and will impose strict penalties on those caught violating regulations and the directions of the SBV, including reducing their credit limits.
