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The interest rate of Bank for Foreign Trade of Vietnam (Vietcombank) has been lowered from 8pct to 7.5pct for one to three months loans. Asia Commercial Bank (ACB), Saigon Commercial Bank (SCB) also lowered their rates for less than one year loans.
Other banks have also indicated that they would also start to lower their rates.
Bank leaders said although the rates had not increased after Tet and despite credit growth falling 0.16% compared to late 2012, deposits still grew.
"When the cap for deposit interest rates for less than one-year terms was limited to 8pct, we thought the customers would withdraw their money to investment, but it has proven otherwise," a bank president said.
The interest rates on the interbank market have remained low with most of the activities centred around deposit transactions as bank liquidity improves from the increased deposits.
According to the SBV, most of the transactions on the interbank market are less than three months terms so the interest rate for those terms increased slightly by 0.60pct.
Moreover, banks have increased their purchases of bonds while restructuring their capital so they can lower deposit rates.
An expert in HCM City said lending activities could only be improved when banks were able to ensure a strong level of capital. Lending rates may then fall and boost the business.