Currently, many banks are working towards gradually reducing the dong deposit rate to prepare for the removal of both ceiling deposit rate and short term lending rate, according to reflection on Tuoi Tre (Youth) newspaper.

Representative from Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank-STB) said that, the bank will offer saving rate at below 10.49 percent per year for short terms and the saving rate of 12 percent/year is only for long terms. Sacombank will also limit, even stop launching promotion and bonus interest rate programmes.

Nguyen Phuoc Thanh, Vietnam Commercial Joint Stock Bank for Foreign Trade (Vietcombank), said that the current deposit rate is around 12 percent/yr. But, it would be ranging around 10-12 percent/yr in coming time.

According to Tuoi Tre newspaper, banks will make big adjustments for short term lending rate. Previously, short term loans were applied the lending rate of medium and long term ones at 16-17 percent/year. However, in the forthcoming time, when applying the negotiable lending rate, the short term lending rate will be maximum at 14 percent/year.

Thanh added that the highest short term lending rate will be only 14 percent/year in the near future and it would be 12-13 percent/year for large scaled enterprises using many banking services. As for medium and long term loans, the maximum lending rate would be 15 percent/year.

At Sacombank, the short term lending rate is ranging around 12-14 percent/year and it is 14-15 percent/year for long term loans.

Smaller banks said that their lending rate will be higher by 1-1.5 percent/year against big banks'.

Explaining about the downward tendency of deposit rate at banks, Tran Hoang Ngan, member of Monetary Financial Policy Consulting Council, said that along with removing the ceiling deposit rate, State Bank of Vietnam (SBV) will enhance providing capital sources for the economy via open market with lower interest rate and longer terms.

Therefore, instead of increasing deposit rate to raise more capital from inhabitants, banks can seek more capital source from open market with cheaper interest rate. Additionally, the central bank also plans to check and supervise the deposit rate at small banks to ensure for an acceptable suitable deposit rate benchmark.

Earlier, at the government's meeting, SBV's deputy governor, Nguyen Dong Tien, said that the capital mobilisation channel from the central bank via open market and refinancing may be longer, till three months, so the capital supply can be ensured in coming time.

(Source: Intellasia)