Commercial banks have moaned over a decrease in their dong deposits after cutting savings interest rates to around 11.2% per annum as committed with the Vietnam Banks Association.
Dam The Thai, head of the Individual Customers Division of ABBank, said mobilizations at his bank have mostly remained unchanged after deposit interest rates were lowered.
An executive at Eximbank also told the Thanh Nien newspaper that the bank has seen contraction in mobilization.
Viet A Commercial Bank, after cutting deposit rates to below 10.8% a year early July, saw its mobilization shrink substantially. The HCM City-based bank recently sought to change the situation by raising the rate to 11.2% to boost liquidity.
Some bankers blamed the fall in mobilization on poor supervision by the Vietnam Banks Association and the central bank, saying many other lenders have not adhered to the commitment by keeping high deposit rates.
The Eximbank executive complained that some other banks have drained savings from his bank by offering a deposit rate as high as 12.5% per annum.
“We’ve been informed of a client withdrawing money from Eximbank for depositing at another joint stock bank that offers a rate as high as 12.5% a year,” he said.
The executive urged the central bank to tighten its supervision so as to create a level-playing field for all lenders. Currently, the central banks have warned banks not to offer bonuses or high-valued gifts which in reality increase the borrowing rate.
However, it is not easy to pinpoint the violator, as all such out-of-law acts are not made public. A depositor said he is having savings accounts at several banks and receiving an annual rate higher than the regulatory rate of 11.2% a year.
Analysts have disagreed with the central bank’s interference to force down the interest rate for Vietnam dong, noting that in the short term, this lower deposit rate will help enterprises to enjoy lower lending rates, but in the long term, this will distort the market as the administrative measure does not reflect the market movements. (STD, Young People)
Vietnamese
