Banks showing great interest in customers

Despite modest credit growth of 0.9 per cent only in 2012’s first half, ACB just presented a new interest rate table with a 13 per cent, per year for 13-month loans and 12.5 per cent, per year to one-year loans.

Though its credit growth in the year ending August contracted 2.3 per cent, Eximbank recently hiked mobilising rate to 12.8 per cent, per year to 13-month lending and 12.3 per cent, per year to 12-month lending, almost 1 per cent more against previous levels.

Besides, banks stepped up promotions to lure depositors. For instance, ACB just came up with a promotional saving programme named ‘ACB Festival Season 2012’ with the prize total value hitting VND9 billion ($428,000).

Sacombank is deploying a promotional programme catered to individual customers with prize total value reaching VND5.7 billion ($271,000).

Western Bank issued first-round short-term registered promissory notes and rolled out flexible deposits with 12.5 per cent per year interest rate to loans from one-year term.

In the recent past, HD Bank rolled out a special saving product under which customers only need to deposit from VND100,000 ($4.7) per month or VND300,000 ($14.2) per quarter periodically to get competitive interest rates. Besides, they could withdraw money prematurely upon demand, said its director Nguyen Huu Dang.

In reality, from early September 2012 the State Bank has tightened lending activities in the inter-bank market. Thereby, thirsty banks can only increase liquidity through mobilising from residents and economic organisations.

Under new State Bank regulations to get lending with terms above 10 days in the inter-bank market credit institutions must not possess over-due debts at the time transactions take place, thus driving up banks’ need for short-term capital.
Banks, finding hard to borrow in the inter-bank market, must raise mobilising rates to attract customers.

A member of the National Financial and Monetary Policy Advisory Council Dr. Tran Du Lich forecast in the current context the credit growth could hardly expand 2 per cent, per month in the remaining months of the year.

Industry experts warned banks to be cautious with the current race vying for depositors as the interest rate is always a double-edge sword. Once the input cost is driven up, it would be hard to achieve the target of reducing lending rates as well as expanding credit growth.