The State Bank of Vietnam (SBV) has decided to lower the ceiling deposit interest rate for VND to 13% per year beginning from March 13.
Ceiling deposit interest rates for VND accounts to be cut to 13% per annum
As a result, interest rates for demand deposits and terms of less than one month will be reduced to 5% per annum from a current 6%.
The capped interest rate for deposits with terms of more than one month will also be slashed to 13% per year, instead of current 14%.
People’s credit funds must lower interest rates for deposits with terms of over a month to 13.5% per annum from current 14.5%.
Interest rate for refinancing services will be slashed by 1% to 14% per year while overnight rate will be down from 16% per annum to 15% and re-discounting interest rate to 12% per year, instead of 13%.
Banks start to lower interest rates
Before receiving the SBV’s official interest rate cut requirement, several commercial banks have started to lower their interest rates by from 1% to 2% per year.
The Vietnam Prosperity Joint - Stock Commercial Bank (VPBank) tops the list for lowering lending interest rates by up to 2% per year. It plans VND5 trillion (USD239.57 million) on such programme.
“The cut in interest rates is aimed at heightening credit growth and helping enterprises and individuals to have a better access to bank loans,” an anonymous VPBank official said.
An Binh Commercial Joint-Stock Bank (ABBank) ranks second for reducing lending rates by 1.5% per year for the first period of interest payment.
Saigon Thuong Tin Commercial Joint-Stock Bank (Sacombank) said it had slashed its lending interest rate for VND for terms of maxi four months for import-export enterprises to 16.5% per year. It plans to spare VND1 trillion (USD47.91 million) to subsidise the programme.
In the meanwhile, the Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank) has decided to cut its lending interest rate for VND by a maxim 1% for enterprises to around 17% per annum.
Vice Chairman Nguyen Duc Huong of the bank said the institution plans to loan over VND6 trillion (USD287.49 million) for agriculture and rural development this year.
In the same move, HSBC Vietnam has announced its plans to lower lending interest rates for individuals wanting to buy houses and cars.
HSBC is applying an interest rate of 15.9% per year for asset-based lending while long-term lending interest rates stand at 18.9% per annum.
Major banks, including Vietinbank, BIDV, Agribank, and Vietcombank have pioneered lowering interest rates.