Central bank to restrain credit institutions with hiked interest rates
The State Bank of Vietnam (SBV) will monitor and deal with credit institutions and branches of foreign banks with hiked interest rates, in a move to reduce capital costs for enterprises and meet credit demand in the economy.
In a document released Thursday, the central bank asked credit institutions to proactively prepare credit for the economy per their assigned credit growth limits.

An announcement on deposit interest rates in front of a Saigon Commercial Bank transaction office. Photo courtesy of Labor newspaper.
Credit institutions are also asked to supply capital for prioritized sectors, including agriculture-rural development, export, small- and medium-sized enterprises (SMEs), supporting industry, and high-tech applications; major economic drives, including investment, consumption, and export; industrial real estate; citizens’ housing demand; social housing, houses for workers, and affordable commercial housing projects.
The SBV also asked lenders to strictly control credit for risky sectors like corporate bonds, securities, real estate, especially avoiding concentrating credit on some major borrowers or some big-scale projects in the luxury segment.
SBV Governor Nguyen Thi Hong requested credit institutions to cut operational costs, administrative procedures, and unnecessary payments to facilitate reduction in loan interest rates, per the parliament's resolution.
According to the central bank's latest data, the country's total credit reached VND11,657 trillion (nearly $494 billion) as of October, up 11.62% from end-2021.
The SBV on December 5 raised its credit growth cap for the country's banking system by 1.5-2 percentage points to 15.5-16%. Deputy Governor Dao Minh Tu said the increase in credit expansion limit will be prioritized for banks with strong liquidity and lending interest rate reductions.
Previously, Prime Minister Pham Minh Chinh urged commercial banks to reduce costs to cut lending interest rates in support of production and economic recovery.
On October 25, the SBV raised the interest rate ceiling for deposits under six months to 6% a year. As a result, banks have increased their deposit interest rates since. As of December 14, deposit interest rates for terms between six months and 12 months were between 6.1%-8.3%, and even higher at 11% for some banks. Such rates went up by three-four percentage points from end-2021.
In order to help credit institutions reduce deposit interest rates, the central bank has been helping liquidity via market operations and by reopening foreign currency sale channels.
Sixteen banks in Vietnam have committed to reducing their loan interest rates by 0.5-3.5 percentage points to below 9.5% per annum to help improve the Vietnamese banking system's liquidity. The lenders include BIDV, Agribank, Vietcombank, ACB, Eximbank, Techcombank, MBBank, BIB, SHB, and others.
Nguyen Quoc Hung, general secretary of the Vietnam Banks Association (VNBA), said some banks had earlier set high deposit interest rates at 9-10% and loan interest rates even higher at up to 11.5%. These capital costs were too high, he said.
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