Vietnam commercial banks are in a race to raise deposit and lending interest rates in the recent weeks, which is forecast to hurt local businesses, the local newspaper Laborer said early this week.
Most of the banks have recently declined to provide loans to new clients, only providing funds to their usual borrowers. Some even halted loan disbursement until they have new interest rate policies.
Analysts have warned that increasing interest rates will certainly affect the production and business of enterprises, especially small and medium sized, thus badly affecting the national economy.
Higher interest rates will lead to higher production costs and, resultantly, higher prices.
Sacombank, Techcombank, Gia Dinh and ACB have all raised their lending interest rates by 0.05-0.15 per cent/month. The lending rates are now 0.9-1.15 per cent per month for short-term loans, and 1.2-1.3 per cent per month for medium and long-term loans.
Analysts say that in the weeks just before and right after Tet, some commercial banks stopped lending due to insufficient VND capital access.
According to Tran Thi Viet Thu, the general director of Gia Dinh Bank, banks need to reconsider their lending interest rate policies, because banks have to mobilize capital at higher costs and have to lend at low rates, which does not yield profit.
Thu also said that banks have not determined their interest rate policies yet, because they still awaiting the central bank’s most recent policy decisions.
Ho Huu Hanh, director of the HCM City Branch of the State Bank of Vietnam, has acknowledged that there is a serious shortage of VND, as banks have had to increase the compulsory reserve ratio, as required by the central bank, and arrange capital to purchase compulsory promissory notes.
Hanh noted the central bank’s current priority is to tame inflation and ensure a high economic growth rate, and, therefore, banks will have to keep a lid on credit.
An official from a joint stock bank said that enterprises will find it even harder to borrow money in the time to come, as the central bank has announced it will inspect credit institutions which have high outstanding loans, and try to tighten real estate and consumer credit. (Laborer)
Vietnamese
