Vietnam Banks Raise Lending Interest Rates to Nearly 20%
Commercial banks in Vietnam have raised interest rates for medium and long-term loans in dong to almost 20% per annum, the one-year record high, as a result of the dong fund shortage.
A customer at a Ho Chi Minh City-based bank was quoted by the newspaper as saying that he had to pay 19.6% per annum for his consumer loan.
The statistics from the State Bank of Vietnam, the country’s central bank, showed that lending interest rates offered by local banks were 15%-17% per annum last week, or 3%-5% higher than the limit set by the central bank.
The higher-than-allowed interest rates were legalized by local banks with a number of surcharges such as assessment fees, mortgaged asset management fees and other kinds of expenses.
The add-on fee is even as high as 7% in some special cases, the paper added.
Bankers all attributed the high lending interest rates to the expensive dong capital they had to mobilize to balance their funds, which are currently being hurt by year-end cash withdrawals by businesses
Low deposit interest rates, meanwhile, have made capital mobilization more difficult.
“Customers refuse to deposit their money at banks with savings interest rates below 10.5% so we have to dodge the law by offering higher-than-allowed rates to depositors to lure more capitals,” said a director of a Hanoi-based joint stock bank.
Vietnam is among ten countries in the world having the high lending interest rates. The high interest rates which are making production costs higher are contrary to the Government’s effort to stimulate the national economy.
Vietnam’s economy grew 5.32% in 2009 while its inflation rose 6.52%. (Labor)
Vietnamese
