The banks made the commitment at a meeting last Friday in Ha Noi with Governor Nguyen Van Giau of the State Bank of Viet Nam.
Participants in the event were five general directors
of the State-run commercial banks and representatives of some major
commercial joint-stock banks, namely the Asia Commercial Joint Stock
Bank (ACB),
the Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), the
Export-Import Commercial Joint Stock Bank (Eximbank), the Viet Nam
Commercial Commercial Joint Stock Bank for Industry and Trade
(VietinBank), and the Military Commercial Joint Stock Bank (MB).
All the bank leaders said that interest rate cuts were
needed for credit institutions to effectively use mobilised capital
sources and make higher profits.
They said assistance from the Government and a consensus among the banks would help them cut interest rates in early July.
Most commercial banks in recent months have made efforts to reduce interest rates on loans.
Top priority has been given to individuals and
enterprises involved in industries suggested by the Government. They
include companies involved in agriculture and rural production,
exporters, and small-and medium-sized enterprises.
The Joint-Stock Commercial Bank for Foreign Trade of
Viet Nam and the Bank for Investment and Development of Viet Nam
offered priority cases of interest rates of only 12 per cent per annum.
The 12.5-per-cent rate was applied by the Agriculture
and Rural Development Bank and the Mekong Housing Development Bank.
Other commercial joint stock banks have used 13 per cent per year.
Based on these results, the bank leaders agreed to a
new interest rate cut plan under which major commercial banks would
immediately cut interest rates of loans in Vietnamese dong to 12 or
12.5 per cent per year for priority areas.
Other commercial banks would have to try to realise this target in a short time.
In regard to deposit interest rates, bank leaders have
committed to make interest cuts within three months, from the current
11.5 per cent per year to 11 per cent immediately, and to 10.2 or 10.5
per cent by late September.
Governor Giau said the central bank would continue to
carry out measures, mostly monetary tools, to actively regulate market
interest rates so they would fall.
He asked commercial banks not to hand out bonuses and
other gifts that could increase interest rates, and to ensure a
consensus among banks.