Banks have been asked to reduce rates to help boost economic growth.
According to a document released recently banks are ordered to reduce operating expenses and unneeded expenses, in addition to administrative procedures, in order to allow for lending interest rates to aid the recovery of the economy and the growth.
Banks have also been directed to continue to promote the government’s interest rate support program for loans to cooperatives, businesses, and households in accordance with the Decree 31/2022/NDCP issued by the Government on May 20 20, 2022.
“The SBV will monitor banks, which continue to raise interest rates, and take measures to deal with the violation cases,” the Governor stated.
At a recent gathering, at a recent meeting, the Vietnam Bankers Association (VNBA) asked its members to maintain the interest rate on deposits in the range of 9.5 percent or less to lower lending interest and encourage economic recovery. The decision was taken following a number of banks raising their rates to 11.5 percent. 11.5 percent annually for a term of 12 months.
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Based on VNBA chairman Nguyen Quoc Hung, the growth in the market created intense competition in the process of obtaining money, which led to instability for both borrowers and depositors.
The rising interest rates on deposit mean cost increases, making it difficult to lower the interest rates on loans to help companies, Hung said.
Representatives from banks at the meeting endorsed the suggestion to keep the interest rate on deposits at 9.5 percent. This is the maximum rate.
Certain banks have begun to cut the interest rates they charge on deposits. According to reports, the race for interest rates has been stalled, with none of the banks raising their rates in the past week , following an explosion of activity over the last few months.
Experts say that to help banks feel more confident in settling for lower rates for deposits The SBV has been working to help banks excess liquidity via OMO, the open market operation (OMO) channels.
In the document that was recently issued the SBV will also require banks to provide preference to loans for agriculture export, small and medium-sized companies, support industries, advanced businesses Industrial park construction, and residential real estate projects that are solvent for those with lower incomes.
Banks must be able to control the credit risk for investments in corporations, bonds, and real estate in accordance with the regulations.