SCB mobilizes $249 mln deposits in one day following bank run

The amount of new deposits at the Saigon Commercial Bank (SCB) reached nearly VND6,000 billion ($249 million) Wednesday, a sharp increase from around VND1,600 billion ($66.3 million) the previous day.

This is a remarkable development in the context of the bank experiencing a run on its deposits for several days starting Friday, over several rumors.

The data on deposits was reported by the Ho Chi Minh City-headquartered private bank to the State Bank of Vietnam.

The earlier deposit withdrawals seemed to have been triggered by rumours after the sudden death of Nguyen Tien Thanh, chairman and CEO of Tan Viet Securities. Thanh, 49, was an independent board member of SCB.

The bank has also clarified the arrest of Truong My Lan, chairwoman of property developer Van Thinh Phat Group, does not affect its business as she does not hold any executive role at the bank.

SCB has since made efforts to mobilize deposits by increasing interest rate and offering other incentives to depositors.

On October 8, SCB raised the savings interest rate by one percentage point for terms of nine months or more. On October 12, the bank issued a coupon of an extra 0.5% interest rate for customers depositing money at the counter for terms of 6-11 months, bringing the interest rate to the highest level of 8.9% a year. The scheme will be applied until the end of October, the bank siad.

State Bank Governor Nguyen Thi Hong had said that the central bank has applied necessary measures to make SCB operate normally and ensure liquidity. "In Vietnam, people's deposits at banks, including SCB, are guaranteed by the state in all cases," she said.

The State Bank recommended that depositors at SCB remain calm and not withdraw deposits before due dates to ensure their interests.

On October 9, authorities began investigating Ha Nam resident Nguyen Kien Quyet for allegedly posting fake information that caused many people to withdraw their deposits from the bank.