Banks ramp up support for customers in COVID-19 time

Many banks willingly raise support to customers in COVID-19 time

After deploying a support package two months ago right after the novel coronavirus (COVID-19) epidemic broke out, privately-held VPBank has just announced another programme to aid small and medium-sized enterprise (SME) customers through curtailing lending rates by 2 per cent maximum compared to common rates, applicable to both existing and new customers.

Along with this, for secured loans, the cut stands at 1.5 per cent per year applied to VND-denominated loans, and 1 per cent per year to USD-denominated loans. For unsecured loans, the rate cut is 2 per cent per year for loans in domestic currency and 1 per cent for USD loans.

“As the pandemic is expected to proceed in a complicated manner in the forthcoming time, aside from closely following instructions and directions from the government and the State Bank of Vietnam, our bank will continue studying the situation to introduce new support packages to both retail and corporate customers,” said a bank representative.

Saigon Hanoi Bank (SHB) has rolled out a major credit packaged valued at VND25 trillion ($1.1 billion), with a rate cut of at least 2 per cent per year compared to the normal rate, alongside exemption from or reduction of transaction fees.

“Driven by our desire to always accompany and share customers' difficulties, simultaneously realising the state’s commitment to supporting firms during the COVID-19 outbreak, our bank has come up with a raft of practical and timely measures to help customers maintain and stimulate production and business,” said Nguyen Van Le, SHB general director.

Similaly, state-owned Bank for Investment and Development of Vietnam (BIDV) has rescheduled debts by extending the deadline for both the original debt and interest payments for businesses operating in fields and areas hit by the COVID-19 pandemic.

Particularly, for retail customers who took up unsecured VND loans, the bank offers a 1 per cent rate cut.

In special cases such as for workers losing their job who are entitled to an allowance of VND1.8 million ($78.26) per month in light of the government’s plan, the bank offers a rate cut of 2 per cent per year, plus not collecting mature original debt and interest from customers while the pandemic lasts.

Regarding corporate customers, BIDV offers diverse credit packages with rate cuts of 2 per cent per year compared to similar loans.

The new programme (applied to both existing and new loans) will end three months after the government officially announces the end of the COVID-19 pandemic.

After the central bank (SBV) softened its interest rate cap on March 16, experts assumed that there would be a certain latency before operating rates are reduced.

This, however, was not true: right after the interest rate cap was reduced, many banks took quick action.

For instance, privately-held VIB has applied uniform interest rates of 4.3 per cent per year for deposits from one month to below six months, compared to the 5 per cent per year level in the previous interest rate table.

Nam A Bank has set interest rate at 4.75 per cent per year to deposits with terms below six months while for deposits above one year the interest rate hovers around 7.4-7.5 per cent a year.

“Reduced operating rates will directly affect borrowing activities in the inter-bank systsem, helping to lessen the expenses of banks, contributing to lowering interest rates for individual customers and business organisations, from there creating an overall impact with a lower interest rate level for the whole economy,” said banking expert Nguyen Tri Hieu.