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SBV slashes interbank, deposit rates

Update: March, 13/2012 - 09:20

 

Workers at a branch of the Viet Nam Bank for Agriculture and Rural Development in the northern mountainous province of Yen Bai. — VNA/VNS Photo Tran Viet
HA NOI — The State Bank of Viet Nam yesterday cut benchmark interbank rates and lowered the ceiling on deposit interest rates that may be paid by commercial banks.

The move, effective today, aims to help struggling enterprises and banks deal with high capital costs and fulfills a promise last week by State Bank Governor Nguyen Van Binh to cut benchmark rates "within the next few days" in order to promote economic growth.

Under the new policy, the refinance rate – a key interbank lending rate – is cut from 15 per cent to 14 per cent, while the discount rate – the annualised rate used in buying treasury notes from banks – is trimmed from 13 per cent to 12 per cent.

The overnight rate, rate at which major financial institutions lend one-day funds among themselves, is reduced from 16 per cent to 15 per cent.

Meanwhile, the cap on deposit interest falls from 14 per cent to 13 per cent for deposits in dong with a term in excess of one year, while the cap on all other deposits, term and non-term, falls from 6 per cent to 5 per cent.

Interest rates on loans from the People's Credit Union are also cut from 14.5 per cent to 13.5 per cent.

The State Bank hiked interbank rates last year in an effort to control credit growth and constrain a soaring inflation rate. However, the annual inflation rate has declined from a high of 23 per cent last August to 16 per cent last month, prompting the rate cut.

Since the fourth quarter of last year, lending interest rates charged by commercial banks to borrowers in the production sector have fallen to 17-19 per cent per year from earlier highs of 22-25 per cent.

In the first two months of the year, interbank market rates declined considerably. They stood last month at 7 per cent for overnight loans and 14 per cent for one-month loans.

Banks cut lending interest rates

Following a recent announcement by the State Bank of Viet Nam, several banks have lowered their interest rates on loans.

HSBC Viet Nam said yesterday it would reduce loan rates on residential mortgages, equity loans and car loans for retail customers.

HSBC will offer a special introductory mortgage rate of 15.9 per cent and a long-term mortgage rate of 18.9 per cent beginning yesterday.

Over the past two weeks, the bank's long-term lending rates have been cut by 2 per cent for all retail customers.

In addition, the Asia Commercial Bank said on Thursday it had allocated VND7 trillion (US$337 million) to offer individual and household customers loans at a preferential interest rate, an average of 1.5 per cent.

ACB has also cut by 1 per cent the interest rate for customers with a stable income who wish to get a loan to buy or repair their houses.

Existing debtors will enjoy a 1.8 per cent cut on loans to supplement their business operations, according to Le Quoc Nam, director of ACB credit for individual customers.

Meanwhile, Lien Viet Post Bank is lowering its lending rate up to 1 per cent to customers who want loans to support their working capital.

However, the loans are given only to customers who operate in the areas of agriculture and production for export, and can prove that their business plans are effective.

Also, the Viet Nam International Bank is offering a 1.5 per cent deduction on its lending interest rate to food and beverage companies, as the bank has allocated VND2 trillion ($100 million) for this purpose. — VNS

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