Standing Deputy Governor of the State Bank Dao Minh Tu requested: "Commercial banks need to consider reducing interest rates, supporting businesses and the economy as a responsibility,..."
"To stabilize the deposit interest rate and ensure the liquidity of the banking system, Vietnam Banks Association had a meeting with its members and 100% agreed to apply the deposit interest rate at terms not exceeding 9.5%/year (including promotions plus interest rates)". Credit institutions also agreed to make efforts to reduce lending interest rates to support businesses through cost savings," General Secretary of Vietnam Banks Association Nguyen Quoc Hung said.
Overview of the conference (Source: Bank Times)
The Banking Association said that the sharp increase in deposit rates by some commercial banks has caused fierce competition for deposits, creating instability for both depositors and borrowers. Furthermore, the increase in deposit interest rates has affected the cost of capital mobilization (input) of all commercial banks up to now and increased significantly compared to the nine-month period of 2022, narrowing the difference in input and output interest rates at a time when lending interest rates are difficult to increase in tandem with deposit interest rates. At the same time, leading to the risk of increasing bad debt and hanging interest from customers.
Therefore, Vietnam Banks Association recommends that credit institutions and commercial banks strictly follow the call for a consensus on deposit interest rates at all times not exceeding 9.5% per year, inclusive of promotional payments.
Up to now, there have been 16 credit institutions registered to reduce lending interest rates, with interest rates reduced from 0.5–3% per year, especially with banks committed to reducing up to 3.5% per year. This reflects the credit institutions' effort and determination to reduce costs and share difficulties with businesses.
Standing Deputy Governor of the State Bank Dao Minh Tu requested: "Commercial banks need to consider reducing interest rates, supporting businesses and the economy as a responsibility, and continuing to reduce operating costs in a timely manner." The most positive way to reduce interest rates is to reduce actual interest rates, reduce interest rates but not increase fees, and focus on disbursing funds in priority areas such as agriculture in rural areas, exports, and production. Exporting auxiliary products into sectors that are the driving force of the economy's growth... If banks have difficulties with liquidity, the SBV will have solutions to support them through tools such as OMO, refinancing loans and Swap foreign currencies.
Standing Deputy Governor of the State Bank Dao Minh Tu (Source: CafeF)
The Deputy Governor suggested that commercial banks continue to implement the program of 2% interest rate support from the state budget of 40,000 billion VND, according to Decree No. 31/2022/ND-CP of the Government. The State Bank will create the best conditions for banks to operate in terms of mechanisms and policies, but it must also ensure the objectives in administering national monetary policy and the objectives set by the government and the National Assembly.
In addition, credit institutions, particularly 30 credit institutions, have been allocated additional credit quotas based on their financial capacity; they continue to reduce costs in order to support customers and reduce lending interest rates as committed with the State Bank.
Source: Economic and Forecasting Journal & BNEWS.