Central bank steps up inspections as some banks raise deposit rates

Central bank steps up inspections as some banks raise deposit rates

The State Bank of Vietnam has kept key policy rates unchanged to ensure banks could access central bank funding at relatively low cost.

A customer makes transactions at a branch of Agribank in Hải Dương Province. The SBV said it would strengthen inspections and supervision of credit institutions that fail to comply with directives aimed at lowering lending and deposit rates. — VNA/VNS Photo

The State Bank of Vietnam (SBV) has ordered efforts to step up inspections of commercial banks and enforce compliance with directives to lower interest rates, amid signs that some lenders have quietly raised deposit rates recently.

In an official dispatch issued on May 21, the central bank instructed its regional branches to hold meetings with local branches of commercial banks and reiterate the directives on reducing market interest rates.

The SBV also ordered regional offices to intensify inspections and strictly handle violations if detected.

The move highlights SBV’s determination to curb a recent upward trend in interest rates at several commercial banks and stabilise borrowing costs to support businesses and households.

The SBV said it would strengthen inspections and supervision of credit institutions that fail to comply with directives aimed at lowering lending and deposit rates.

The central bank said that it had implemented a range of monetary policy measures to help contain inflation, maintain macroeconomic stability and support economic growth.

As part of those efforts, the SBV had kept key policy rates unchanged to ensure banks could access central bank funding at relatively low cost.

On March 30, the SBV issued a directive requiring banks and foreign bank branches to implement measures to stabilise market interest rates and support the monetary market.

On April 9, the central bank held a meeting with commercial banks to push for lower deposit and lending rates and to improve credit access for businesses and individuals.

Many banks subsequently lowered rates during April but some lenders have been reported to have recently adjusted deposit rates upward.

Earlier this month, the SBV instructed its regional branches to inspect commercial bank branches with comparatively high deposit and lending rates and conduct specialised examinations where necessary.

The central bank said it would continue closely monitoring developments in deposit and lending rates across individual lenders, as well as interest rate disclosures published on banks’ websites, to ensure compliance with its policy direction.

The SBV also said it stood ready to provide liquidity support to the banking system and would continue using monetary policy tools flexibly to stabilise financial markets. 

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