The State Bank of Vietnam has countered accusations about bank revenues and disclosed the interest paid to depositors.
Banks pay VND300 trillion in interest to firms and individuals
There was accusations that with outstanding loans reaching VND2,700 trillion (USD129 billion), banks would earn nearly VND400 trillion at an interest rate of 15% a year.
However, at a conference to review the contribution of the banking system to country's economic development on May 7, the SBV said the banks could not make such huge profits.
According to Pham Xuan Hoe, deputy head of the SBV's Monetary Policy Department, banks were still liable to pay staff wages, contribute to their risk prevention funds, and pay interest.
SBV announced that their interest payments in 2012 reached VND300 trillion, including VND280 trillion interest payments for enterprises and individuals. Even major corporations and state agencies deposited their money into banks.
Hoe said the annual interest banks have to pay the State Capital Investment Corporation (SCIC) is VND1.5 trillion and VND1.4 trillion to the State Treasury. Banks also have to pay VND18 trillion to the Vietnam Social Security Organisation.
At the same time, a survey conducted by Vietnam Chamber of Commerce and Industry (VCCI) revealed that 74.47% enterprises admitted that banks were their main source of capital. Firms said they would not have enough money to maintain business if they did not borrow from banks, but if they took loans, they might not be able to pay the interest.
Many experts said that Vietnam's economy depended too heavily on bank capital which might lead them to a 'middle income trap'.
