Bank rates under the microscope

17:16 | 07/03/2012
Chopping lending rates is now in the spotlight.

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It was time for the State Bank to consider scaling down diverse rates by 1 per cent point and ceiling deposit rates for credit institutions (14 per cent) will also be lowered by 1 per cent point, according to State Bank governor Nguyen Van Binh.

Recently, lending rates have slid slightly, particularly in priority fields agricultural and rural development and export. In the meantime, some banks have announced setting aside several trillion Vietnam dong tantamount to several dozen million US dollars to aid customers.

However, this lower-cost credit package was only applied to specific customer groups.

For instance, at state giant Vietcombank its current floor lending rate for firms in production and trading fields is set at 14.5 per cent, but the rate is just applied to customers making export payment through the bank.

Similarly, at Agribank short-term lending rates for farmers in agriculture, silviculture, fishery and salt production fetched 15.5 per cent; to production, procurement and export processing of agricultural items and food is set at 14.5 per cent and to production, procurement and processing of food and agricultural items for domestic consumption 16.5 per cent per year.

Medium-term lending rates in these fields are pegged at 17, 17.5 and 18 -18.5 per cent, respectively.

Lending rates to firms in production and trading fields are generally put at 17-19 per cent, per year. The rates are between 17-20 per cent per year at small banks and 16.5-18 per cent at bigger ones.

A joint stock bank executive assumed even if ceiling deposit rate was pulled down by 1 per cent point reducing lending rates could not be done immediately and the lending rate will fetch around 18 per cent, per year in the near term.

“Allocating credit growth targets based on bank groups as in 2012 is one of positive factors affecting on interest rate situation. Sliding lending rate will gain pace in the coming period,” said ACB deputy general director Do Minh Toan.

In fact, lending rates on the interbank market have been eased significantly in the recent months. It now ranged between 7-8 per cent for overnight lending, half of that in January 2012 and fetches 13-14 per cent for one-month lending against January 2012’s 18-19 per cent.

One strong foreign player in Vietnam’s banking market ANZ, however, assumed the State Bank needed to be cautious with loosening monetary policies.

“The central bank should wait until late 2012’s first quarter to cut down ceiling deposit rate by 1 per cent point to be able to ensure March inflation be under control,” said a ANZ bank representative.

By Thuy Vinh

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