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State Bank pushes lower lending rates
The State Bank of Viet Nam (SBV) has requested that commercial banks and credit institutions slash lending interest rates for the production sector to between 17 per cent and 19 per cent per year, as promised by Nguyen Van Binh, SBV Governor.
At the first meeting between the central bank and the 12 major commercial banks (G12) – which account for 85 per cent of market shares – in Ha Noi on Tuesday, Governor Binh said the SBV would publish loan information to help domestic producers access credit more easily.
The meeting also discussed issues such as falling deposits in Vietnamese dong, which affects a bank's' liquidity.
To help increase bank liquidity, especially among small institutions, the SBV plans to access Open Market Operations to re-finance credit institutions, Binh said.
The SBV is also planning to announce its 2012 credit growth plan at the beginning of next month.
The central bank has asked commercial banks to review and tighten their lending in foreign currencies, while applying higher borrowing requirements for companies with revenue exclusively in Vietnamese dong.
Deposits and foreign currency lending should be reduced, the SBV said.
Last week, the SBV regulated that non-term deposit interest rates offered by commercial banks and other credit institutions would be capped at 6 per cent per year, from October 1.
The cap on deposit interest rates for term deposits of one month or more will remain unchanged at 14 per cent at banks and 14.5 per cent at credit unions.
In the past few months, a number of commercial banks have flouted the rule by offering higher interest or bonus interest to entice depositors. Some banks have also given depositors overnight interest of 14 per cent. These practices introduce a high element of risk into the nation's banking system, the SBV said.
Small banks have to increase their non-term rates to lure customers from larger banks.
After the circular became effective, banks slashed their non-term deposit interest rates to under 6 per cent per year.
Sai Gon Commercial Bank (SCB) announced on Monday a non-term deposit interest rate of 4.2 per cent per year.
Western Bank posted a rate at 6 per cent for one – to six-day-terms, while ABBank listed rates of 3 per cent and 6 per cent for non-term and one, two, three-week terms.
Customers en masse withdrew deposits after small banks reduced their non-term rates.
At the meeting, the SBV also said it was mulling a draft to sanction banks which offered higher deposit interest rates or bonuses to entice customers.
Accordingly, credit institutions that were found to have violated the regulation would also be temporarily stopped from opening more branches and transaction offices and establishing subsidiaries for six months.
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