Thursday,  May 13, 2021,23:25 (GMT+7) 0 0
Deposits at banks modest due to low interest rates
The Saigon Times
Wednesday,  Apr 14, 2021,11:17 (GMT+7)

Deposits at banks modest due to low interest rates

The Saigon Times

A person arranges stacks of Vietnamese banknotes. Capital has been poured into other sectors rather than banks due to their low deposit rates - PHOTO: THANH HOA

HCMC – Low deposit rates at commercial banks have resulted in a low growth of capital flows into banks, while the capital that has been poured into other sectors, such as insurance, real estate, bonds and securities, has surged.

According to the Department of Credit for Economic Sectors under the State Bank of Vietnam, in the first quarter of this year, the deposit growth reached only 0.54%, well below the credit growth of 2.93% and the average deposit growth of 2.28% in the first quarter of the past seven years, Lao Dong newspaper reported.

At present, the rate for savings of less than six months is 3%-4%. Meanwhile, tenors of six to less than 12 months and over 12 months enjoy a rate of 3.5%-5.5% and 4.6%-6%, respectively.

Although some banks have revised up their deposit rates by 0.1-0.4 percentage points, the banks’ average deposit rate in the first quarter remained some 2 percentage points lower than that in the same period last year.

If the trend continues, the banking system’s liquidity will no longer be ample this year, according to Bao Viet Securities Company.

Meanwhile, the General Statistics Office stated that capital had been injected into other sectors, with life insurance premium soaring 11%. Meanwhile, the securities market mobilized nearly VND55.6 trillion, surging 42% over the same period last year.

Pham Lam, vice chairman of the Vietnam Association of Realtors, attributed land fevers over the past few months partly to residents’ idle money and their expectations of higher prices of real estate products.

According to Dao Minh Tu, deputy governor of the central bank, as of mid-March, banks’ outstanding loans for the property sector grew 2.13%, higher than the current credit growth of 2.04%, despite the central bank’s close control over credit for the sector.

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