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Vietnam banks slashing rates
Publication Date : 11-04-2014
Several banks in Vietnam have slashed their interest rates to below the central bank-imposed ceiling of 6 per cent amid abundant capital.
Deposit interest rates listed at the Vietnam Export Import Bank (Eximbank) for a term ranging from one to three months has been cut to 5.7 per cent from the previous 6 per cent. The deposit interest rate for the 4-5 month term has also been slashed to 5.98 per cent from 6 per cent.
Sacombank has also cut the deposit rate for the term of between seven and 11 months. The annual rate of 6.55 per cent has been applied to the 7-8 month term, while 6.7 per cent has been set for a 9-10 month term and 6.8 per cent for the 11-month term.
According to the central bank, credit in the first quarter this year rose by only 0.01 per cent, showing that banks are enjoying a surplus of capital.
Despite the abundant capital, interest rates are still above the deposit rate ceiling in some ailing banks, according to the Phap luat TP HCM newspaper.
Deputy Governor of the State Bank of Viet Nam (SBV) Nguyen Phuoc Thanh said that the interest rates over the deposit rate ceiling had greatly reduced, showing that in spite of solid liquidity in some aspects of the banking system, it was not a uniform trend.
He explained that the liquidity of some ailing banks was so restricted that it was forcing them to try to attract depositors with interest rates above the ceiling rate.
Thanh said the central bank would plan to boost competition in the banking sector by solidifying the banking industry through restructures and weeding out weak banks.
In a foreacast on credit sector trends in the second quarter of this year released last week, most credit institutions said deposit and lending rates in Vietnamese dong would continue to decline this year.