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Banks continue to offer high deposit interest
Despite expectations of lower deposit interest rates, commercial banks continued offering the regulated cap of 14 per cent per annum for term deposits between two weeks and 12 months.
However, under-the-table, depositors could still negotiate the rate to around 18 per cent for a one-month term if they had VND1 billion (US$49,000) or more. In some cases, the term was extended to three months.
Several banks, including Eximbank and Sai Gon Commercial Bank, have started promotional programmes, which benefit minor depositors as well.
Meanwhile, several banks have already exceeded the two-per cent fence for deposits in the US dollar. Large sums could help double the official rate.
An industry insider said that without the above-the-cap rate, banks could hardly maintain existing deposits, not to mention attracting additional cash, as the risk of high inflation still exists.
Meanwhile, the large gap between interest rates for the dong and the dollar have prompted corporate borrowers to choose foreign currency.
The lending rate for dong, which has experienced some slack, remained high, at around 21 per cent, while that for the dollar was no more than 8 per cent.
The exchange rate has been stable in recent days and is expected to remain in that direction at least until the year-end.
Figures from the State Bank of Viet Nam showed that by June 20, mobilisation of the US dollar had fallen by 3.62 per cent month-on-month while dong mobilisation rose by 2.32 per cent.
Credit growth in dong as of June 20 had declined by 0.43 per cent. The US dollar climbed by 2.43 per cent month-on-month.
A further comparison to the end of 2010 showed that outstanding loans in the dollar had increased by 23.5 per cent and in domestic currency by only 2.76 per cent.
Vietcombank chairman Nguyen Hoa Binh said both lenders and borrowers longed for reduced rates but that it would take some time for that to occur.
The situation has influenced credit growth. Vietcombank and DongA Bank announced 8 per cent credit growth in the first six months, but the figure fell to under 3 per cent for Sacombank.
The average was more than 7 per cent for the year's first half, compared to the annual target of 20 per cent set by the State Bank.
Room for credit growth is large, but filling it is difficult. Tran Phuong Binh, general director for DongA Bank, said he did not expect strong growth in the remaining months.
Meanwhile, Nguyen Chien Thaêng, president of the HCM City Handicraft And Wood Industry Association, said his bank members lost foreign customers as they dared not to sign large and long-term contracts because of capital insufficiency for production.
Thuy Anh
vietnamnews
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