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Banks go above limit for deposits
Commercial banks were offering yearly interest of up to 14 per cent for Vietnamese dong deposits this morning after offering 12 per cent when they opened for business earlier this week.
The higher interest contravenes an agreement made between the banks and the Viet Nam Banks Association (VNBA) last Friday that the interest offered for deposits would not be allowed to go higher than 12 per cent.
The decision was made after the central bank raised the prime rate to nine per cent.
The Viet Nam News has found that nominal interest rates are at 12 per cent for most deposit terms.
But some ban officials have been told to call depositors and offer at least 13.5 per cent with other incentives.
The yearly interest rate at Western Bank totals 15 per cent when a three-per cent bonus for total deposits is added to the 12 per cent on offer.
Senior bank officials say retaining depositors has become very difficult as people worry about growing inflation and more expensive gold and dollars.
And as Friday's interest-rate agreement does not prohibit promotions, there is the danger of an interest rate war.
The VNBA says it cannot interfere in promotion campaigns.
To be updated.
vietnamnews
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