First banks lower interest rates

October 15, 2010 | 11:50

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HA NOI – Several commercial banks on October 15, 2010 began lowering their deposit interest rates by 0.2 percentage points to 11 per cent per year in compliance with an agreement made between the Vietnam Banks Association (VNBA) and the State Bank of Vietnam.

The agreement, which goes into effect from October 15, requires banks to cut interest their rates to no more than 11 per cent, instead of 11.2 per cent. The move is designed to urge banks to cut capital input costs and help enterprises access more credit.

Asia Commercial Bank (ACB) is the first bank to apply the new interest rate on 36 month deposits. Interest rates for one week to 24 month deposits range from 9.9 to 10.88 per cent per year.

However, ACB will give depositors cash as a bonus, which is equal to 0.15 per cent of their primary deposit.

Earlier this week, Techcombank, DaiA Bank, HDBank also cut their deposit interest rates to below 11.2 per cent.

VNBA's general secretary Duong Thu Huong said as inflation pressures continue to grow during the final months of the year interest rate cuts would be executed with prudence with respect to the market's behaviour and the depositor's expectations.

HDBank's acting general director Nguyen Huu Dang said that if depositors expected high interest rates, then lowering the interest rates on deposits would not be able to absorb excess capital.

VNS

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