Banks continue to breach deposit-rate cap
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Many banks continue to exceed the deposit interest-rate cap of 14 percent cap they agreed with the State Bank of Vietnam last month by surreptitiously offering gifts and even fines to depositors.
Some banks enter into a contract with depositors that allows them to make late disbursements, thus adding 1-2 percent interest as a “fine,” the general director of a bank in Ho Chi Minh City’s District 1 – who wished to remain unnamed – said, pointing out some even offer “gifts” in the form of a percentage or two of interest above the contracted rate.
A deputy director of a District 5-based bank said large depositors would withdraw their money if banks stuck to the cap.
However, if there is no crackdown on the violations, another interest-rate war like the one at the end of 2010 will break out, he warned.
In early December, commercial banks began to competitively hike deposit-interest rates after Techcombank suddenly raised its maximum rate to 17 percent plus a 0.6 percent bonus.
The central bank stepped in and, together with the Vietnam Banking Association, ordered Techcombank to roll back the hikes to bring a truce.
Loan interest rates are also pretty high – at 18-19 percent for businesses and 20-22 percent for consumer loans.
Some banks have stropped lending.
