Commercial banks have agreed to reduce lending rates by between 0.5 and 1 per cent per year for borrowers from May to the end of the year.
The interest rate for loans in Vietnamese dong will be capped at 13 per cent per year for loans involving production costs of agriculture-forestry-fishery and salt sectors, exporters and medium and small-scale enterprises.
For trading purposes of real estate, securities and consumption, commercial banks will be allowed to apply lending rates under the agreement in accordance with capital supply and demand and the solvency of customers.
This was the result of a meeting between State Bank Governor Nguyen Van Giau and leaders of State-owned commercial banks and the general secretary of the Association of Banks on the implementation of a Government resolution, which took place on Tuesday.
Prime interest rate kept at 8% State Bank of Viet Nam (SBV) Governor Nguyen Van Giau on Tuesday signed a decision to keep the prime interest rate unchanged at 8 per cent per annum.
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According to reports by the general directors of commercial banks, some joint stock commercial banks had large funds mobilised through a number of hedge funds and their subsidiaries to provide loans at bargain rates, adversely affecting currency market stability.
Governor Giau has required State-owned commercial banks to review and examine the taking of deposits from hedge funds and companies under joint-stock commercial banks. For high deposit interest rates with short-term capital which leads to liquidity difficulties for commercial banks and the whole banking system, State commercial banks should make divestments for these companies and the State Bank would refinance them to compensate for the capital shortages incurred afterward.
The general directors of commercial banks were also unanimous to reduce interest rates in Vietnamese dong by implementing measures to apply deposit rates by consensus among members of the Association of Banks at around 11.5 per cent per year. Unclear promotion was not allowed to be carried out so as to avoid unfair competition.
The State Bank will conduct comprehensive inspections on companies and the hedge funds of joint-stock commercial banks that already make deposits in State commercial banks.
