Lowering interest rates is good but disbursement needs to be accelerated

Speaking to VTC News on the sidelines of the National Assembly, Representative Vu Tien Loc (Hanoi) highly appreciated the State Bank of Vietnam's (SBV) directive to credit institutions to thoroughly reduce costs in order to lower lending interest rates, thereby supporting businesses, people, and the economy in recovering production and business activities.

According to Mr. Loc, the State Bank of Vietnam's continued reduction of policy interest rates is a flexible solution, appropriate to current market conditions, to achieve the goal of reducing lending interest rates to support the economic recovery process in accordance with the National Assembly 's policy and the Government and Prime Minister's directives; thereby, the State Bank of Vietnam continues to guide the reduction of market lending interest rates, contributing to alleviating difficulties for businesses, people and the economy.

Representative Vu Tien Loc answers questions from the press in the corridors of the National Assembly.

"The State Bank of Vietnam's continued reduction of the policy interest rate confirms and establishes a downward trend in interest rates for the market in the coming period, thereby guiding credit institutions to be more bold and decisive in reducing lending interest rates, accompanying businesses and people, contributing to promoting growth and economic recovery," said delegate Vu Tien Loc.

However, Mr. Loc also stated that, in the current credit sector, besides reducing interest rates, the speed of disbursement by banks, helping businesses access capital, is also a very important factor, demonstrating that policies are implemented effectively and actively support people and businesses. This is crucial for the business operations of enterprises.

"If the loan disbursement process is prolonged, it could kill businesses. Conversely, if it is implemented quickly and the time is shortened, it will help businesses access capital more easily and recover production and business more quickly," Mr. Loc said.

Meanwhile, economist Dr. Nguyen Minh Phong argues that whether businesses can access loans quickly or slowly depends on their financial capacity and ability to meet the necessary requirements of each bank. Businesses want to access loans as quickly as possible, which is a very legitimate desire, but banks cannot make a breakthrough and must adhere to regulations on credit safety.

Therefore, according to Mr. Phong, the most important issue for banks is to lower interest rates, while the most important issue for businesses is to find ways to meet the banks' requirements.

"The most important thing is to reduce lending interest rates, because in reality, up to this point, banks have mainly reduced deposit interest rates, while lending interest rates have not decreased much or proportionally to the reduction in deposit interest rates," Mr. Phong said.

Many banks have reduced deposit interest rates. (Illustrative image: Vietnam+).

On June 16th, the State Bank of Vietnam announced its fourth reduction in policy interest rates since the beginning of the year, effective from June 19th. Accordingly, the overnight lending rate for interbank electronic payments and the lending rate to compensate for capital shortages in clearing payments by the State Bank of Vietnam to credit institutions decreased from 5.5%/year to 5%/year; the refinancing rate decreased from 5%/year to 4.5%/year; and the rediscount rate decreased from 3.5%/year to 3%/year.

The maximum interest rate applicable to demand deposits and time deposits with a term of less than 1 month remains unchanged at 0.5%/year; the maximum interest rate applicable to time deposits with a term from 1 month to less than 6 months has decreased from 5%/year to 4.75%/year.

Specifically, the maximum interest rate for VND deposits at People's Credit Funds and Microfinance Institutions has been reduced from 5.5%/year to 5.25%/year; interest rates for time deposits of 6 months or more are determined by credit institutions based on market supply and demand for capital.

The maximum short-term lending interest rate in VND for credit institutions to borrowers for capital needs in certain economic sectors and industries has decreased from 4.5%/year to 4.0%/year; specifically, the maximum short-term lending interest rate in VND for People's Credit Funds and Microfinance Institutions for these capital needs has decreased from 5.5%/year to 5%/year.

This is the fourth time since the beginning of 2023 that the State Bank of Vietnam has reduced the policy interest rate. The previous three reductions were between 0.5% and 1.5% per year in March, April, and May 2023.

Following this regulation from the State Bank of Vietnam, starting from June 19th, banks have simultaneously adjusted and reduced deposit interest rates.

Specifically, PVCombank significantly reduced interest rates by 0.5 percentage points for terms of 6 months or more. Currently, the bank's online deposit interest rates are only 7%/year for 6-month deposits; 7.3%/year for 7-8 month terms; 7.4%/year for 9-10 month terms; 7.5%/year for 11-month terms; 7.7%/year for 12-month terms; and 7.8%/year for terms over 12 months.

NamA Bank reduced interest rates by 0.1 to 0.3 percentage points for terms of 6 months or more. Online deposit interest rates for 6-month and 9-month terms decreased to 7.6%/year. Interest rates for 12-14 month terms decreased slightly by 0.1 percentage point to 7.7%/year. A similar reduction also brought deposit interest rates for terms of 15 months or more down to 7.5%/year.

Vietcombank, a major bank, also reduced deposit interest rates for 1-2 month terms from 4.5% to just 3.6%/year; 3-5 month terms from 5% to 4.3%/year; and 6-11 month terms down to 5.2%/year from 6%/year last week. Interest rates for terms of 12 months or more also dropped sharply from 6.8% to 6.3%/year.

Agribank reduced interest rates for 1-2 month terms from 4.7% to 4.3% per year; and for 3-5 month terms from 4.9% per year to 4.5% per year. Simultaneously, the bank further reduced interest rates for longer terms for the first time this month. The 6-9 month term rate decreased from 6% to 5.7% per year; and the 12-month term rate decreased from 6.8% per year to 6.3% per year.

Meanwhile, some banks have reduced interest rates two or three times since the beginning of the month. HDBank announced its third further reduction in deposit interest rates, with a 0.2 percentage point decrease for deposits of certain terms of 6 months or more. According to the online deposit interest rate chart, the interest rate for a 6-month term is now 7.5%/year; terms of 7-11 months are only 6.9%/year; and terms of 12-13 months are 7.5%/year. The 18-month term, however, remains unchanged at 7.1%/year.

BaoViet Bank also reduced interest rates for the second time this month. The reduction amounted to 0.5 percentage points for online deposit terms. The interest rate for a 6-month term is now 7%/year; for 7-11 month terms, it's 7.1%/year after a 0.5 percentage point reduction. The interest rate for a 12-month term decreased by 0.2 percentage points to 7.7%/year; the 13-month term is 7.9%/year (the highest rate); and the interest rate for 15-18 month terms remains unchanged at 7.6%/year.

OCB Bank has reduced interest rates for the second time, with a significant decrease of 0.5 percentage points, bringing the rates to 7.3% and 7.4% per year for 6-month and 9-month terms, respectively. The 12-15 month term saw a 0.3 percentage point reduction to 7.6% per year. Terms of 18 months or more were reduced by 0.2 percentage points to 7.4% per year.

VietA Bank has reduced interest rates for the second time, decreasing them by 0.2 percentage points for terms of 6 months or more. Interest rates for 6-11 month terms are now 7.4%/year, and for 12-18 month terms, they are 7.6%/year.

PHAM DUY

Beneficial
Emotion
Creative
Unique

Source: https://vtc.vn/dai-bieu-quoc-hoi-giam-lai-suat-la-tot-nhung-can-day-nhanh-giai-ngan-ar800714.html