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Sunday, July 21, 2024

Banks agree to slash lending rates

By N. Tan

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HCMC – Sixteen banks are offering an annual interest rate discount of 0.5-3 percentage points for clients from December 2022 to the end of January in 2023, the Vietnam Bankers’ Association said. The total interest rate reduction amounts to VND3.5 trillion.

Yesterday morning, December 15, the association held a meeting to seek solutions to prop up production and business.

Though strains on the Vietnam dong-U.S. dollar exchange rate have been relieved, along with a stabilized financial market, deposit rates remain high for tenors of 12 months or longer, at 9-10% per year, said an association official.

Some banks have even raised interest rates further, at 11.5-12% a year, fueling competition and creating anxiety among depositors and borrowers, he added.

Aware of the current situation, the association on December 7 called on its members to set an annual deposit rate cap of 9.5% for all tenors to stabilize interest rates and guarantee banking sector liquidity, thereby enabling businesses to take out loans at lower rates.

To date, 16 banks have promised to lower interest rates, amounting to VND3.5 trillion, by dropping their annual lending rates by 0.5-3 percentage points, said Nguyen Quoc Hung, general secretary of the association.

BIDV has cut 0.5-2.5 points of interest rates for businesses operating in prioritized industries, import-export sectors, foreign firms and those affected by Covid-19.

Agribank has reduced its rates for outstanding loans in the Vietnamese dong taken out before November 30 by 20%. For loans given out in December, the bank offers an interest subsidy of up to 20% for borrowers based on their businesses.

Vietcombank has decreased interest rates for loans in the Vietnamese dong for its clients from January to the end of December by one percentage point. So far, around 175,000 clients have benefited from the interest subsidy, with a credit scale of over VND500 trillion, accounting for nearly 50% of the outstanding balance.

ACB has slashed lending rates by one percentage point for clients taking out loans from December 6 to the end of January 2023, while SHB is offering an interest subsidy of 1.5-2 percentage points for borrowers operating in prioritized sectors and businesses producing necessities.

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