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The “undercurrent” on the monetary market
Due to the liquidity problems, some commercial banks try to “risk their lives” to attract more deposits by offering the interest rates higher than the allowed levels.
The State Bank of Vietnam has threatened to impose heavy punishment on the banks which deliberately offer the deposit interest rates higher than the ceiling level of 14 percent set up by the State Bank. However, commercial banks still have been trying to “dodge the laws”, offering high interest rates to lure more deposits.
Thanh Van, who lives in Tan Binh District of HCM City said that last week she received a call from a credit officer of V Bank which has the headquarter in Hanoi, who invited her to make deposits at the bank at high interest rates.
The officer said that if Van deposited one billion dong or more, she would get the interest rate of 18 percent per annum (4 percent higher than the ceiling level). The saving book will still show that the interest rate is 14 percent per annum, but Van would get the extra money in cash which is equal to 4 percent.
Van said that she usually deposits money at the bank, therefore, her name can be found in the list of the loyal clients of the bank who have been regularly taken care by the bank officers.
In fact, not only V Bank, many other small banks in HCM City are also trying to dodge the laws to attract more deposits. Meanwhile, other banks have been running promotion campaigns or organize lucky draws, promising big prizes to big depositors.
Though the banks all have affirmed that their deposit interest rates are not higher than the ceiling levels, analysts have pointed out that it is very difficult to define the actual interest rates depositors can get, if counting on the awards they receive from banks. Meanwhile, analysts have pointed out that with lucky draws, nearly all the depositors, can get lucky gifts, which makes the actual interest rates they can enjoy much higher than the quoted rates.
A banker said that banks really do not want to break the laws, but they have to, because they have no other choice to improve their liquidity
The State Bank of Vietnam late last week released a report, showing that the total deposits at banks by October 20 had decreased by 0.74 percent from the previous month, of which Vietnam dong deposits had decreased by 1.29 percent, and foreign currency deposits had increased by 1.73 percent.
The figures show that banks are really thirsty for capital. A banker has said that while the demand for loans increases significantly at the end of the year, banks have to restrict lending because the mobilized capital is on the decrease.
At present, banks have to borrow money on the interbank market at 25 percent per annum, which means that they have to re-lend at the interest rates of 27-28 percent.
As such, it is nearly impossible for businesses to seek low cost capital sources. Though the inflation rate has been decreasing, the lending interest rates would not decrease, because of the capital flow gets stuck.
“The interbank market has not performed the way expected by the central bank. It would be acceptable if one abstains from food for one or two days. But he will suffer heavy diseases if the situation cannot be improved.
The same thing will occur with banks: if they continue suffering from the capital thirst, their liquidity problem will be more serious. If so, the central bank will have to spend more money to intervene in the market,” the banker has warned.
A lot of banks have been trying to attract more capital by offering higher interest rates for gold deposits. The interest rates have been raised to 2.7-3.2 percent per annum. As such, since the beginning of November, the gold deposit interest rates have increased by 0.5-1.5 percent over October. As for many banks, gold deposits prove to be their “fairy godmothers”.
vietnamnet, Saigon dau tu
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