Central bank calls for loan interest cuts

April 08, 2013 | 08:12

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State Bank of Vietnam (SBV) Governor Nguyen Van Binh has called on commercial banks to cut costs in order to reduce interest rates on business loans.

Binh told bankers and businessmen at a conference in Ho Chi Minh City yesterday that they need to have candid discussions to find a common voice.

He cited the forecasted inflation rate of below 7% for 2013 as reasonable grounds for banks to further cut lending rates.

The governor said that interest on short and long term loans could fall to 10% and 13% respectively.

Le Ngoc Dao, Vice Director of the HCMC Department of Industry and Trade, also proposed that banks should offer new loans at 10% and lower interest rates on existing loans to 15% to support local businesses.

According to To Duy Lam, head of the SBV in Ho Chi Minh City, deposits at banks in the city rose 13.3% year on year in the first quarter of 2013.

He added that lending in the first two months fell 0.54% but picked up 0.26% in March compared to the end of 2012.

Lam said the outstanding loans for five priority sectors reached VND96.163 trillion (US$4.62 billion) as of March 21, up 7.1% against the end of 2012.

However, commercial banks acknowledged that the entire system is still struggling with ways to achieve the annual credit growth set target.

Nhan Dan

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