Many banks have slashed interest rates to below the ceiling level of 6percent regulated by the State Bank of Vietnam (SBV) amid abundantcapital.
Deposit interest rates listed at the Vietnam ExportImport Bank (Eximbank) for the term ranging from one to three months hasbeen cut to 5.7 percent from the previous 6 percent rate. The depositinterest rate for the 4-5 month term has also been slashed to 5.98percent from 6 percent.
Sacombank has also cut the deposit ratefor the term of between seven and 11 months. The annual rate of 6.55percent has been applied to the 7-8 month term, while 6.7 percent hasbeen set for a 9-10 month term and 6.8 percent for the 11-month term.
Accordingto the central bank, credit in the first quarter this year rose only0.01 percent, showing that banks are enjoying a surplus of capital.
Despitethe abundant capital, interest rates are still above the deposit rateceiling in some ailing banks, according to the Phap luat TP HCMnewspaper.
Deputy Governor of the State Bank of Vietnam NguyenPhuoc Thanh said that the interest rates over the deposit rate ceilinghad greatly reduced, showing that in spite of solid liquidity in someaspects of the banking system, it was not a uniform trend.
Heexplained that the liquidity of some ailing banks was so restricted thatit was forcing them to try to attract depositors with interest ratesabove the ceiling rate.
Thanh said that the central bank wouldplan to boost competition in the banking sector by solidifying thebanking industry through restructures and weeding out weak banks.
Ina foreacast on credit sector trends in the second quarter of this yearreleased last week, most credit institutions said deposit and lendingrates in Vietnamese dong would continue to decline this year.-VNA
Deposit interest rates listed at the Vietnam ExportImport Bank (Eximbank) for the term ranging from one to three months hasbeen cut to 5.7 percent from the previous 6 percent rate. The depositinterest rate for the 4-5 month term has also been slashed to 5.98percent from 6 percent.
Sacombank has also cut the deposit ratefor the term of between seven and 11 months. The annual rate of 6.55percent has been applied to the 7-8 month term, while 6.7 percent hasbeen set for a 9-10 month term and 6.8 percent for the 11-month term.
Accordingto the central bank, credit in the first quarter this year rose only0.01 percent, showing that banks are enjoying a surplus of capital.
Despitethe abundant capital, interest rates are still above the deposit rateceiling in some ailing banks, according to the Phap luat TP HCMnewspaper.
Deputy Governor of the State Bank of Vietnam NguyenPhuoc Thanh said that the interest rates over the deposit rate ceilinghad greatly reduced, showing that in spite of solid liquidity in someaspects of the banking system, it was not a uniform trend.
Heexplained that the liquidity of some ailing banks was so restricted thatit was forcing them to try to attract depositors with interest ratesabove the ceiling rate.
Thanh said that the central bank wouldplan to boost competition in the banking sector by solidifying thebanking industry through restructures and weeding out weak banks.
Ina foreacast on credit sector trends in the second quarter of this yearreleased last week, most credit institutions said deposit and lendingrates in Vietnamese dong would continue to decline this year.-VNA
