Local banks have continued raising the interest rates for certificates of deposit (CD) to attract customers, with some even raising rates beyond the record high of 9 percent per annum, according to a report on the Nguoi Lao Dong Online website.
VietABank has announced a CD product with a minimum face value of VND10 million and a tenor of 24 months, offering interest rates of 8.38 percent per year for clients who withdraw interest monthly and up to 9.1 percent per year for those taking out interest at the end of the term.
In recent days, many lenders have sped up CB issuance to improve capital mobilisation, spurring up interest rates for the channel as high as 9 percent per year.
Sacombank is introducing a new product for individual and corporate customers, applying an interest rate of 8.6 percent per year for CDs with a minimum value of VND1 million and tenor of 84 months. Meanwhile, BDIV and SHB have launched CDs to mobilise medium- to long-term capital with interest rates up to 8.9 percent per year.
Explaining the high interest rates, an official of a local lender, said that banks usually apply lending rates of 10 percent to 12 percent per year for corporate borrowers who want to develop a new project. Therefore, they mobilise capital through the CD channel, with rates 1.2 to 1.5 percentage points higher than normal deposit rates.
Speaking at the Vietnam Private Sector Economic Forum 2019 last week, Dao Minh Tu, deputy governor of the State Bank of Vietnam, said that the economy still relies on the medium and long-term sources of the banking system since these credits make up some 50.6 percent of the total outstanding loans.
This has placed heavy pressure on and increased risks to the banking network. Therefore, to meet the capital demand of businesses and the economy, it is necessary to develop the stock market to reduce reliance on banks, the official said.
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