Việt Nam to inspect banks over interest rate cuts in November

Việt Nam to inspect banks over interest rate cuts in November

The inspections will begin immediately within this month, with results to be reported to the Prime Minister.

A customer borrows at a bank in Hà Nội.  — VNA/VNS Photo

The State Bank of Vietnam (SBV) has instructed its regional branches to conduct thematic inspections of credit institutions to assess their compliance with interest rate reduction requirements.

The inspections will begin immediately within this month, with results to be reported to the Prime Minister.

The inspections will focus on credit institutions' compliance with legal requirements and SBV directives on interest rate reductions. Based on the inspection findings, authorities must promptly identify, rectify and strictly penalise any violations in accordance with the law.

Previously, the SBV issued another directive on October 18 this year, requiring credit institutions to cut listed deposit rates by at least 0.5 percentage points per annum for maturities of six months or longer, while reducing lending rates by 1.5–2 percentage points for production, business activities and priority sectors.

The central bank also warned that banks engaging in non-compliance or unhealthy interest rate competition could face stricter measures, including lower credit growth limits for the remainder of 2026 and 2027, as well as higher prudential requirements.

At a Government press briefing on November 4, SBV Deputy Governor Phạm Thanh Hà said banks had been asked to reduce operating costs and share profits with customers to lower overall interest rates.

According to the SBV, state-owned and foreign banks have cut listed deposit rates by around 0.5 percentage points, while joint-stock commercial banks have reduced them by 0.5–0.7 percentage points per annum. Actual lending rates on new loans declined by 0.2–0.5 percentage points by the end of October compared with the beginning of the month.

More than 20 commercial banks have also introduced preferential credit packages for production, business and priority sectors, with interest rate reductions of 0.5–2 percentage points.

As of October 26, total outstanding credit in the economy exceeded VNĐ20.8 quadrillion (US$810 billion), up 11.94 per cent from the end of last year. 

Bizhub