VietNamNet Bridge – Commercial banks have been told by the State Bank to lower the deposit interest rate to 7.5 percent per annum. However, if they do, they would not be able to attract deposits.

Banks all have quoted the new deposit interest rate of 7.5 percent per annum for short term deposit as instructed by the State Bank. However, the actual interest rates offered by some banks to depositors are higher than the ceiling levels.

At first, a credit officer told Nguoi lao dong reporters, who said they wanted to deposit some money at the bank, that the interest rates are 7.5 percent for 1-9 month term deposits, and 11.5 percent for long term (more than 12 months) deposits.

However, after realizing that the deposit sum was big, VND400 million, the officer said the bank can pay higher, at 10 percent. “The saving book would still show the quoted interest rate of 7.5 percent. But in fact, you will receive 10 percent. You would get the interest rate gap in cash, immediately,” she said.

The same conversation was made at another bank. The credit officer informed to the reporters that the bank would accept to pay 8 percent per annum instead of the ceiling interest rate of 7.5 percent stipulated by the State Bank.

A banker in HCM City said one should not be surprised when seeing banks pay higher than 7.5 percent per annum for deposits. “It’s quite a normal thing that banks “break the ceiling”,” he said. “If they don’t, they would die. They need to mobilize capital at any costs now in order to exist.”

However, the banker said, only the small banks which are facing the liquidity problem, would accept to pay high interest rates to mobilize capital. Some big banks with strong liquidity, had slashed their deposit interest rates before the official decision was made by the State Bank.

Vietcombank, Eximbank, Sacombank and SeABank have quoted the new interest rate of 7.5 percent for short term deposits.

Banks tend to pay higher interest rates, 10-11 percent per annum, for long term deposits, if depositors accept to receive interests when the loans become matured. If they want to receive interests monthly, the interest rates would be 10-10.3 percent.

Especially, Southern Bank and Asia Commercial Bank only pay 7.3 percent per annum, which shows that they are not too thirsty for capital.

In fact, since the credit has been growing very slowly, banks have been trying to lower the lending interest rates to push up lending. In order to do that, they have been trying to force the deposit interest rates down. Therefore, the decision by the central bank to reduce the ceiling interest rate has been applauded by many banks.

Analysts have noted a lending interest rate competition among some big banks. ANZ has fixed the interest rate of 12.5 percent for two years for those, who borrow money to buy houses, and the 14 percent per annum for consumer loans.

Eximbank now lends at 10 percent per annum to production enterprises. Especially, the interest rate has been offered for the clients who borrow money to buy houses, cars or go studying overseas for the first three months.

In general, banks regularly set up very high interest rates, once reaching 22 percent per annum, for consumer loans. Therefore, it is really a big surprise to people when banks have offered the interest rates at below 10 percent. Sacombank, for example, has quoted the lending interest rate of 9.9 percent per annum for two months, applied to the clients borrowing money to buy houses.

NLD