Vietnam banks begin reducing deposit interest rates in response to PM’s direction

Several commercial banks in Vietnam have started reducing deposit interest rates by 0.1 to 0.4 percentage points in response to the Prime Minister’s direction to lower rates to help achieve the Government’s "at least 8%" growth target in 2025.

VietBank has cut rates by 0.1 to 0.4 percentage points, while BVBank has lowered rates by 0.1 to 0.3 percentage points.

Maritime Bank (MSB) and Eximbank have both reduced rates by 0.2 percentage points for specific terms.

Although these reductions are modest, they contrast with the recent upward trend in rates.

As of February 26, only three banks – GPBank, CBBank, and Woori Bank – offer rates of 6% or higher for certain deposits.

The State Bank of Vietnam (SBV) aims for stable lending rates to support the economy, while private banks compete to raise deposit rates to attract deposits.

The SBV is committed to monitoring the market and ensuring transparency in lending rates.

It will take strict action against banks that violate regulations, especially those that have recently increased deposit rates, as part of efforts to maintain economic stability.

Prime Minister Pham Minh Chinh has emphasized the importance of lowering lending rates to support economic growth, urging banks to reduce operating costs and prioritize credit for productive sectors.

Deposit rates reached a peak of over 12% per annum at the end of 2022, following the collapse of a private bank, in which the SBV had intervened in order to safeguard the system’s safety.

As a result, deposit interest rates began to decline in March 2023, ultimately reaching a historic low of around 4% per annum for both state-owned and private banks.

However, there has been a recent resurgence in the rates, with the current averages standing at 5% for state-owned banks and over 6% for private banks.