Commercial banks' deposit interest rate has remained low at the beginning of October, the Vietnam News Agency reported.

 

Deposit interest rate among Vietnam Bank for Agriculture and Rural Development (Agribank), Bank for Investment and Development of Vietnam (BIDV), Vietcombank and VietinBank - the country's largest commercial banks or the big 4 - stayed in the range of 5.5-5.6 per cent for 12-month, 4 per cent for 6-9-month and 3,1-3,4 per cent for 1-3 month term deposits. 

 

Other commercial banks have been offering more attractive rates at 5.4-7.1 per cent, notable among them were Techcombank, ACB and MSB  at 7.1 per cent annually for 12-13-month deposits at a minimum of VNĐ30 billion (ACB), VNĐ200 billion (MSB) and VNĐ999 billion (Techcombank).

 

Meanwhile, LienVietPostBank, MB Bank, VietABank, HDBank and SCB also offered decent rates from 6.8-6.99 per cent for 12-month deposits with a minimum around ranging from VNĐ200-300 billion. 

 

The low interest rate for deposits is part of an effort to lower lending rates for consumers and businesses, which have been struggling during the pandemic. 

 

However, even with lower rates, the banks have found it difficult to find borrowers in the last two months as demand plummeted during numerous lockdowns in major cities and provinces across the country, according to Nguyễn Tuấn Anh, head of the Credit Department of Economic Sectors under the State Bank of Vietnam (SBV).

 

Anh said he expected demand to recover once lockdowns have been relaxed or lifted completely. 

 

"The country recorded a 7.18 per cent in credit growth by the end of August since the beginning of the year. It's still possible for us to meet the 12 per cent yearly target by the end of the year but it will take sound and flexible credit policies," he said. 

 

Experts said there was still room to lower the borrowing rates but by itself, it won't be enough to help businesses recover.

 

"With plenty of liquidity in the system, we can go lower still on the borrowing rate. While this is especially helpful for many businesses who have been borrowing to speed up their recovery it doesn't help those who have not been able to secure new capital," said Dr Nguyễn Trí Hiếu, saying a lower rate did not mean the banks were cutting corners when it comes to safety. 

 

Commercial banks have slashed more than VNĐ8.8 trillion (US$386 million) in interest rates from July 15 to August 31 in support of businesses that have been severely affected by the novel coronavirus, according to the SBV. — VNS