Banks told not to hike interest rates
Banks told not to hike interest rates
Commercial banks operating in the country have been asked not to increase their interest rates, including deposit rates, while the central bank stands ready to provide liquidity support for banks affected by the fast spreading coronavirus.
The announcement was made at a meeting, held on February 6, on mapping out appropriate credit measures to support enterprises and local residents directly affected by the new coronavirus, which emerged in the Chinese city of Wuhan late last year, reported Nguoi Lao Dong newspaper.
Speaking at the event, Dao Minh Tu, deputy governor of the State Bank of Vietnam (SBV), noted that the Wuhan coronavirus could badly affect manufacturing and business operations in the country, particularly the sectors of tourism services, logistics, import-export and agricultural production, as well as lending and repayment of debts.
Accordingly, commercial banks and other units in the local banking sector should proactively follow up on business performance and the extent of damage experienced by borrowers due to the Wuhan virus, so they can promptly adopt supporting measures including rescheduling repayments and lowering interest rates.
Departments of Monetary Policy and Credit at the central bank were asked to quickly complete draft policies that support coronavirus-affected borrowers. They have to also ensure that the execution of these policies will not cause volatility in the credit market and will not affect the classification and handling of bad debts.
The deputy governor added that commercial banks must not raise interest rates or deposit rates as their liquidity is adequate. The central bank will make adjustments to help banks lower interest rates and support companies and local people in emergencies, aside from providing credit support, remarked Tu.
Earlier, the SBV governor on February 4 issued Dispatch 541 requesting credit institutions to balance capital sources to meet the financial demand of manufacturers and businesses.
To date, Vietnam Prosperity Bank, or VPBank, has announced interest rate cuts for enterprises suffering the effects of the epidemic. A maximum reduction of 1.5% per year will be applied to unsecured loans and 1% per year for secured loans.
For individual clients, Kienlongbank on February 6 stated that it would lower lending rates by up to 3 percentage points per year for existing customers who wish to take out loans for cultivating fruits such as dragon fruit, watermelon, durian, jackfruit, rambutan and bananas. The rate cut is valid from February 1 to April 30.
