Vietnam Banks Start New Race to Raise Interest Rates
Interest rate race among commercial banks in Vietnam is taking new forms with banks competing fiercely for much needed capital right after the central bank urgently set a cap of 12 per cent per annum on bank deposits.
Without interest rates as the impetus behind attracting clients, banks are now implementing promotional campaigns.
SeAbank is giving gold to depositors of a certain amount. Those who deposit VND110 million at the bank for 13 months get 0.1 tael of SJC gold, while those with deposit of VND1.1 billion for the same duration will get a whole tael.
The primary cause of the recent interest rate race was banks’ poor capital use, said a banking official.
Secretary General of the Vietnam Banking Association Duong Thu Huong also said the interest rate race is not only dangerous for banks, but also the economy as a whole, and must be stopped immediately.
Seven days ago, the central bank decided to interfere into the interest rate hike race among local banks by asking them not to the deposit rates to over 12 per cent a year.
The move proves to be reasonable and is expected to help stabilize the monetary market, which has been disordered recently due to the interest rate race.
At present, almost all banks are offering 12 per cent per annum for 1-2 month term deposits and 11.5 per cent per annum for three month deposits as requested by the central bank. (Labor)
Vietnamese
