Vietnam PM requests probe into banks with increased deposit interest rates

Prime Minister Pham Minh Chinh has requested the State Bank of Vietnam, the country's central bank, to immediately inspect banks that have lifted their deposit interest rates, a driver of increased lending rates.

The order is specified in a dispatch on deployment of measures to bring down lending rates, sent to SBV Governor Nguyen Thi Hong on Monday.

The dispatch aims to strengthen the effectiveness of state management in the monetary and banking fields to bolster GDP growth to 8% or more, a target approved by the legislature last week.

"Some banks have raised their mobilization interest rates, a driver of higher lending rates," the dispatch reads.

Announcement and deployment of deposit and lending interest rates by credit institutions must ensure compliance with legal regulations and directions of the Government, the Prime Minister, and the SBV, the dispatch stressed.

"Violations should be promptly and strictly handled. The Governor considers and decides to use the SBV's management tools like credit growth limits and license revocation according to regulations and report results to the Prime Minister before February 28, 2025."

The Prime Minister noted that the SBV should regularly and closely monitor developments related lending and deposit interest rates of commercial banks, while implementing more drastic and effective solutions within its authority to reduce lending interest rates, creating conditions for people and businesses to access loans at reasonable costs.

"This will help restore and develop production and business, promote economic growth associated with macroeconomic stability, control inflation, ensure major balances of the economy, and solidify the safety of the banking system," he added.

The National Assembly, Vietnam's legislature, last week set the 2025 economic expansion target at "8% or more" upon a government proposal, up from the 6.5-7% approved in November last year.

The target is associated with maintaining macroeconomic stability, controlling inflation, and ensuring major balances of the economy, creating a foundation for higher growth in the following years.

Other targets include a GDP scale of over $500 billion, GDP per capita of over $5,000, and an average CPI hike of 4.5-5%. The country's GDP in 2024 was estimated at $476.3 billion.