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Bank urges stricter controls
The State Bank Governor has urged stricter control over monetary and banking activities in an aim to stabilise the market.
The Governor also told bank leaders to impose strict penalties on banks and credit agencies as well as individuals who are violating the regulations.
SBV Governor Nguyen Van Giau has asked chairmen of management councils and general directors of banks and credit organisations to closely monitor activities related to interest rates, exchange rates, loans and foreign currency.
Since July 1, when a hotline was set up for the public to make recommendations and complaints about banking issues, many complaints about foreign exchange and credit-related activities have been received from enterprises and individuals.
Lending rate cut
Most of the complaints have been about interest rates on loans that are higher than State Bank rates and additional fees added by banks on loans.
Asking borrowers to leave a portion of their loan in their account and selling foreign currencies at a rate beyond State Bank regulations were also among the complaints.
In response to the Government's call to help stabilise the money market and share the burden with clients, the Bank for Investment and Development of Viet Nam (BIDV) yesterday decided to cut lending rates.
The move was described as a breakthrough at a time of spiraling interest rate hikes in the banking industry and other banks could follow.
On Tuesday, the BIDV said it would cut the lending rate by 0.2 per cent per year for all customers taking out loans in Vietnamese dong from the BIDV network nationwide from July 9 to December 31.
The ceiling interest rate on loans set by the SBV had been 21 per cent.
For high priority clients, BIDV's cut will be 0.6 per cent. Clients include owners of projects assigned by the Government, the manufacturing sector and essential goods sector, as well as key construction projects scheduled for completion for 2008 an 2009.
Exporters with stable markets will also benefit from the preferential rate.
BIDV will decrease the lending rate on US dollar loans to 6.8 per cent from the maximum lending rate of 8.8 per cent per year for short-term loans.
Beneficiaries will include importers of key commodities such as steel, fertiliser, oil products, pharmaceuticals, and animal feed, among others. These commodities are termed as essential under criteria issued by the Ministry of Industry and Trade.
BIDV will also ensure a sufficient supply of dollars to meet demand of enterprises, individuals, and even foreign banks.
The bank will sell dollars at quoted prices, calculated by adding the regulatory margin to the official rate on the inter-bank market.
The bank said that it would set aside 20 per cent of its dollar resources to sell to foreign banks on the inter-bank market.
It will also sell dollars to companies importing commodities used for local production and consumption and for processing export products. It will not provide dollars for importing luxury goods.
Individuals having legitimate demands for dollars such as studying abroad, travel, and overseas treatment will also be able to buy dollars from the bank.
BIDV chairman Tran Bac Ha said the bank wanted to help the business community and its clients and promote essential sectors in the economy and help bolster economic development.
"The ultimate goal is to help contain inflation and achieve macroeconomic stability to maintain sustainable development," he said.
VNS
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