Banks are expected to cut lending interest rates with support from the central bank (Source: VNA) Hanoi (VNS/VNA) - Commercial banks are expected to lower lendinginterest rates after getting more support to cut input costs from the StateBank of Vietnam (SBV)’s agencies this week.
After reducing several key interest rates by 0.25 percentage points onSeptember 16, the SBV’s agencies this week continued to announce the reductionof some service fees, which will help commercial banks reduce operation costsand thus cut interest rates.
Under Decision No 203/QĐ-TTTD, the SBV’s National Credit Information Centre(CIC) decided to reduce the prices of its credit information products andservices given to credit institutions and foreign banks’ branches in Vietnam by15 percent, starting from October 1 this year.
According to the CIC, the reduction aims to help commercial banks cut operatingcosts, enabling them to lower interest rates.
The cut will also help banks promote the use of CIC’s credit information toenhance their credit business segment and credit risk governance, which willcontribute to reducing risks for the banking system.
According to Nguyen Hoang Minh, deputy director of the SBV’s HCM City branch,the CIC’s information is important for banks to control risks in lending,because a firm can open accounts at many different banks at the same time.
Currently, the CIC’s database stores more than 40.6 million dossiers ofborrowers, including those of about one million enterprises. The databaseis built with the participation of 122 credit organisations and foreign banks’branches, nearly 1,200 people’s credit funds and four official micro-financialorganisations.
In the same move, another agency of the SBV – the National Payment Corporationof Vietnam (NAPAS) – also announced a reduction for its local switching systemservice fees. The system is interconnected by more than 170,000 ATMsnationwide, starting from October 1 this year.
Specifically, it has reduced 24/7 interbank money transfer service fee forbanks by 13 percent. ATM withdrawal service fees have been also cut by 70 percentfor banks that issue the ATMs and 100 percent for banks that conduct thepayment.
NAPAS has also providedfree internal transfer service and non-financial transactions such asinformation inquiry and statement printing for banks.
In addition, the agency has also continually implemented a promotion programmeto reduce 50 percent of its service fees for transactions at ATMs and 24/7interbank transfer transactions from October 3, 2019 to December 31, 2019 forbanks.
On September 16, the SBV decided to make the first interest rate cut sinceOctober 2017, which helped credit institutions access more affordable capitalfrom the SBV, enabling them to improve liquidity and keep market interest ratesstable.
Accordingly, the annual refinancing rate and rediscount rate has been loweredfrom 6.25 percent to 6 percent, and from 4.25 percent to 4 percent,respectively.
The annual overnight electronic interbank rate and rate of loans to offsetcapital shortage in clearance between the central bank and domestic banks havebeen also cut to 7 percent./.
VNA
