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Ceiling scrap may create new deposit war
The market is likely to see a renewed deposit rate war between banks despite the efforts of all the parties concerned.
While the Government, the Viet Nam Bankers’ Association, and the State Bank of Viet Nam have urged the commercial banks to keep the interest rates within the now-scrapped 11 per cent ceiling, many banks seek to increase the rates to attract more deposits.
In the first quarter, deposits grew by only 5.5 per cent while loans outstanding were up 10.8 per cent.
Many of the smaller joint stock banks continue to borrow heavily despite the very high inter-bank rates which have been continuously rising recently. On April 17, the inter-bank rate stood at 22 per cent.
To raise more deposits, in the last two weeks, many banks have sought ways to get around the ceiling rates through promotions and bonuses.
Some banks even quietly raised their rates up to 14 per cent in case of large deposits, with VPBank and Habubank being the pioneers.
Analysts say the amount of deposits with domestic banks have decreased because real interest rates are low or negative.
They say banks need to increase the rates to overcome their current dong shortage.
VNS
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