On November 19th, the State Bank of Vietnam (SBV) officially lowered the ceiling deposit rate by 0.5 percent to five percent per annum, applicable for terms of less than six months. Banks have started the race to reduce both deposit and lending rates.
According to the SBV’s decision issued on November 18th, the maximum dong interest rate applicable to demand deposits and deposits of less than one month is cut from one percent to 0.8 percent per annum.
The maximum dong interest rate applicable to deposits with terms from one month to less than six month is reduced from 5.5 percent per annum to five percent per annum. The maximum rate applicable to deposits with terms from one month to less than six months at people’s credit funds and microfinance institutions is lowered from six percent to 5.5 percent per annum, and the rates for deposits from six months and more are determined by credit institutions on the basis of market capital supply and demand.
In parallel with the reduction of input interest rates, the maximum short-term lending rates in dong for capital needs to serve agriculture, rural areas, export, supporting industries, small and medium enterprises, enterprises (SMEs) that apply high technology is cut from 6.5 percent per annum to six percent per annum. The maximum short-term dong lending rate of the people’s credit funds and microfinance institutions for these capital needs decreases from 7.5 percent to seven percent per annum. This move, according to the SBV, is to support enterprises and stimulate the economic growth.
In response to the policy of reducing interest rates of the SBV, banks have entered the race to reduce both deposit and lending rates.
Accordingly, ACB cuts 0.2 percent per annum of savings interest rates for long terms. In addition, ACB also cuts lending rates. The bank’s preferential lending rates are now only from seven percent per annum.
Previously, in the end of October 2019, to support individual customers and enterprises in the last months of 2019 and to start the business plan in 2020, ACB launched the programme called “Quick access, low interest rates” with the programme limit of up to five trillion dong, disbursed until the end of 2019.
ABC offers this programme to individual customers (new and existing ones) borrowing to supplement working capital with interest rates from 7.5 percent per annum. In addition, the programme also targets SMEs. The package incentives promise to bring the highest financial efficiency to customers. Customers who qualify for this loan programme will enjoy a minimum short-term lending rate of seven percent per annum, fixed for up to six months.
To stimulate credit demand in the peak business season in the end of the year, banks have started to launch preferential credit policies. Export Import Commercial Joint Stock Bank (Eximbank) offers a four trillion dong package with preferential interest rates from only 6.99 percent per annum to SME customers.
Meanwhile, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) launches a programme which supports up to 80 percent of the value of the loan with a maximum borrowing term of eight years. Customers can choose among several interest rate options, such as 6.9 percent per annum, fixed in the first three months; 7.9 percent per annum, fixed in the first six months; 8.9 percent per annum, fixed in the first 12 months; etc.
At Nam A Commercial Joint Stock Bank (NamABank), to help SMEs access preferential capital, the preferential lending rates are applied from 6.5 percent per annum for long terms from 36 to 120 months), from 7.5 percent per annum for medium terms from 24 to less than 36 months.
NamABank also offers preferential interest rate of 7.5 percent per annum to green credit. In addition, the home loan interest rates at NamABank are currently fairly favourable from only nine percent per annum. This is not the lowest interest rate but also quite appropriate, because this is the ceiling rate and will be adjusted quarterly, monthly, but the adjustment is insignificant.
Vietnam Thuong Tin Commercial Joint Stock Bank (Vietbank) uses 500 billion dong for the fields of manufacturing, trade and services, etc. with lending rate of seven percent per annum. An Binh Commercial Joint Stock Bank (ABBank) offers a 2.5 trillion dong package to SMEs with the latest annual revenue of maximum 200 billion dong which expect to supplement short-term capital in the end of 2019 and the beginning of 2020. The lending rate is 7.8 percent per annum, fixed in the first three months, or 8.3 percent per annum, fixed in the first six months.
Previously, many banks lowered input interest rates. For example, Viet Capital Commercial Joint Stock Bank (VietCapitalBank) slightly cut six-month rate from 7.4 percent to 7.3 percent per annum, nine-month rate from 7.8 percent to 7.7 percent per annum. In addition, the highest interest rate of VietCapitalBank also decreased by 0.1 percentage point to 8.5 percent per annum, applicable for terms from 24 to 60 months.
Similarly, Export Import Commercial Joint Stock Bank (Eximbank) announced its new interest rate table from November 7th 2019, with reduction on many terms. For example, for 15-month and 18-month terms were cut by 0.2 percentage point to 8.1 percent per annum, while the rate for 12-month term fell by 0.1 percentage point to 7.7 percent per annum.
