4:01:45 PM | 24/10/2008
Several joint stock commercial banks in Vietnam have followed the state-owned banks in cutting deposit interest rates, especially since the country's central bank decided to slash the base interest rate from 14 per cent to 13 per cent October 21, the Tien Phong newspaper reported.
The common interest rate is now 16 per cent-16.5 per cent per annum, a considerable decrease from the highest peak of 19 per cent seen four months ago, the paper said.
October 22, An Binh Joint Stock Commercial Bank (ABBank) cut 1-1.5 percentage points of all deposit terms. Three month deposits at ABBank are now 16.5 per cent per annum. Rates increase to 16.75 per cent for six months and to 16.3 per cent for 12 months.
Meanwhile, with VND100 million deposits for one to two months at Southeast Asian Joint Stock Commercial Bank (SeABank), clients are being offered at 15.84 per cent yearly compared to 16.5 per cent previously.
SeABank is the bank which offered the record high interest rate of 19.2 per cent in June.
Commercial banks have reasons to slash deposit interest rates. Capital has become more profuse, while liquidity has become better as the State Bank of Vietnam has decided to raise the interest rates on compulsory reserves.
They themselves want to reduce capital mobilization costs in order to push up loaning in the last months of the year.
The Vietnam Banking Association, after the meetings with southern and northern members, released a document urging banks to adjust interest rates to fit the new circumstances and support businesses.
Analysts believe that other sharp decreases in interest rates will occur in the time to come.
Lower deposit rates will create conditions for bankers to further reduce lending rates. This will make it easier for enterprises to get bank loans and help boost the earnings of local companies. (Pioneer)
Vietnamese
