Under the agreement with the Vietnam Banking Association (VNBA), from October 15, commercial banks will drop the deposit interest rate to 11 percent per year.
But in a bid to retain sources of savings in the threat of rising inflationary pressures and enhancing the competitiveness in raising capital, banks are wary of cutting interest rates, while more applying various forms of promotion.
DaiA Bank is a typical example. Although the bank has cut down deposit rates by 0.01 percent - 0.05 percent per year, for the terms of 1 - 12 months, it has applied the deposit rate of almost 11 percent per year plus bonus rates at its "super flexible savings" programme, so DaiA Bank's average interest rate remain unchanged at 11.2 percent per year in most of the periods.
October October 18, TrustBank launched the programme "TrustBank - Gifts at hands." Just sending 5 million dong or $300 for the corresponding period, customers will have the opportunity to receive gifts up to 5 times. Especially, when sending from one billion dong with three months forward, customers will be offered a coupon worth 500,000 dong Co-op Mart.
Nguyen Dinh Tung, deputy general manager of Maritime Bank said, it could hardly avoid resource savings decline after the input interest rate adjustment. "Thus, increasing the attractiveness of saving interest rates is needed to attract idle cash to meet capital needs during the end of this year," Tung said.
Trinh Van Tuan, general director of Orient Commercial Bank (OCB), said that input costs will benefit banks, but in the current context, when the inflation pressure is signaling to rise, customers' psychological expectation is to gain high interest rates, it is difficult to decrease the interest rates. "On the other hand, the capital demand at the peak business season of the year has been increasing, so there is an opportunity for banks to develop credit," Tuan said.
Besides, some banks are increasing promotions and gifts for saving depositors. For example, in Asia Commercial Bank (ACB), after lowering interest rates on deposits to a maximum of 11 percent per annum (applicable to most of the periods), on the due date, this bank also pays an amount bonus (with bonus rate multiplied by the number of principals at the beginning). Accordingly, the bonus rate applicable to deposits in dong is 0.36 percent for 36 month term and 0.10 percent for US dollar deposits (36 months).
Overall, interest rates have been already established in a new premise, with the highest 11 percent per year, down 0.2 percent compared to the previous day October 15. However, banks are still applying the interest rates equally to all terms from one to 24 months. On the other hand, banks also find it hard to cut costs in the form of discounts, gifts with the reason that competition for capital mobilisation is getting tougher and need for capital in dong from customers, especially business sector is showing signs of increase.
According to Duong Thu Huong, Secretary general of VNBA, the association will continue to monitor the dynamics of member banks for cutting down interest rates and will continue to dispatch calls on banks to cut spending inputs, so that they may lower interest rates upon by the policy of the government.
But a leader of a bank in HCM City said, lending interest rates will be hardly reduced compared with the average of 13-14 percent per year (for business customers) and 14 - 16 percent per year (with individual customers.) Additionally, with the Vietnamese prime minister's directive has been just launched, which refers to the State Bank of Vietnam's research to issue appropriate policies and mechanisms to allow commercial banks to withdraw money from the circulation in order to reduce pressure on prices, especially at the end of the year, when the volume of payment of projects are made with high density and the amount of bonus, salaries are paid in the New Year festival.
So, it is most likely that interest rates will be fixed at 11 percent per year and be more difficult to be reduced further in the future.
Dr Le Xuan Nghia, deputy chair of the national monetary and financial supervision council said, the adjustment of interest rates has indicated many positive signs, but the common lending rates in dong for companies (not prioritised under the government's policy) remains relatively high (over 15 percent per year) and in general, SMEs are still very difficult to access bank financing.
But in a bid to retain sources of savings in the threat of rising inflationary pressures and enhancing the competitiveness in raising capital, banks are wary of cutting interest rates, while more applying various forms of promotion.
DaiA Bank is a typical example. Although the bank has cut down deposit rates by 0.01 percent - 0.05 percent per year, for the terms of 1 - 12 months, it has applied the deposit rate of almost 11 percent per year plus bonus rates at its "super flexible savings" programme, so DaiA Bank's average interest rate remain unchanged at 11.2 percent per year in most of the periods.
October October 18, TrustBank launched the programme "TrustBank - Gifts at hands." Just sending 5 million dong or $300 for the corresponding period, customers will have the opportunity to receive gifts up to 5 times. Especially, when sending from one billion dong with three months forward, customers will be offered a coupon worth 500,000 dong Co-op Mart.
Nguyen Dinh Tung, deputy general manager of Maritime Bank said, it could hardly avoid resource savings decline after the input interest rate adjustment. "Thus, increasing the attractiveness of saving interest rates is needed to attract idle cash to meet capital needs during the end of this year," Tung said.
Trinh Van Tuan, general director of Orient Commercial Bank (OCB), said that input costs will benefit banks, but in the current context, when the inflation pressure is signaling to rise, customers' psychological expectation is to gain high interest rates, it is difficult to decrease the interest rates. "On the other hand, the capital demand at the peak business season of the year has been increasing, so there is an opportunity for banks to develop credit," Tuan said.
Besides, some banks are increasing promotions and gifts for saving depositors. For example, in Asia Commercial Bank (ACB), after lowering interest rates on deposits to a maximum of 11 percent per annum (applicable to most of the periods), on the due date, this bank also pays an amount bonus (with bonus rate multiplied by the number of principals at the beginning). Accordingly, the bonus rate applicable to deposits in dong is 0.36 percent for 36 month term and 0.10 percent for US dollar deposits (36 months).
Overall, interest rates have been already established in a new premise, with the highest 11 percent per year, down 0.2 percent compared to the previous day October 15. However, banks are still applying the interest rates equally to all terms from one to 24 months. On the other hand, banks also find it hard to cut costs in the form of discounts, gifts with the reason that competition for capital mobilisation is getting tougher and need for capital in dong from customers, especially business sector is showing signs of increase.
According to Duong Thu Huong, Secretary general of VNBA, the association will continue to monitor the dynamics of member banks for cutting down interest rates and will continue to dispatch calls on banks to cut spending inputs, so that they may lower interest rates upon by the policy of the government.
But a leader of a bank in HCM City said, lending interest rates will be hardly reduced compared with the average of 13-14 percent per year (for business customers) and 14 - 16 percent per year (with individual customers.) Additionally, with the Vietnamese prime minister's directive has been just launched, which refers to the State Bank of Vietnam's research to issue appropriate policies and mechanisms to allow commercial banks to withdraw money from the circulation in order to reduce pressure on prices, especially at the end of the year, when the volume of payment of projects are made with high density and the amount of bonus, salaries are paid in the New Year festival.
So, it is most likely that interest rates will be fixed at 11 percent per year and be more difficult to be reduced further in the future.
Dr Le Xuan Nghia, deputy chair of the national monetary and financial supervision council said, the adjustment of interest rates has indicated many positive signs, but the common lending rates in dong for companies (not prioritised under the government's policy) remains relatively high (over 15 percent per year) and in general, SMEs are still very difficult to access bank financing.
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