Governor of the State Bank Nguyen Van Binh is a newly appointed minister, but he has to deal with old problems – high interest rates and weak banking system. Bank restructuring remains on paper In fact, the warnings about the weak banking operation were given by experts a long time ago already, who urged to restructuring the banking system to improve the national economy. However, only recently has the State Bank of Vietnam sent the messages about the determination to restructure banks. Right after the message was conveyed, the information has stirred up the public. This has become the topic in many discussions and on many forums. People are waiting with impatience to see what bank is the first one to be restructured. However, to date, no concrete action has been made, while the bank restructuring remains on paper. The State Bank of Vietnam has said it is still compiling the bank restructuring plan which will be submitted to the government in the time to come. According to … [Read more...] about Handling with weak banks, slashing interest rates, when?
Not only raising the gold deposit interest rates, commercial banks have also raised the non-dollar deposit interest rates, the thing that no one thought it would happen. The euro, Australian dollar, Canadian dollar deposit interest rates have increased significantly to 4 percent per annum at the highest, much higher than the interest rate of 2 percent per annum now offered for dollar deposits. In general, banks only pay low interest rates of 0.1-0.5 percent per annum to non-dollar deposits, while a lot of banks refuse non-dollar currencies, because in Vietnam, the US dollar remains the most popular foreign currency, and the US dollar is always the main currency for making payment for imports and exports. Therefore, no one could imagine before that the non-dollar deposit interest rates would increase, especially at this moment, when the dollar price keeps increasing sharply. However, the unimaginable thing is happening. Since November 15, Eximbank offered the interest rate of … [Read more...] about Non-dollar deposit interest rates increase unexpectedly
A lot of businesses say the preferential interest rates of 17-19 percent only exist on paper, while they never can enjoy such interest rates, and they still have to borrow money at the interest rates of 20-22 percent on average. Two months after the day the State Bank of Vietnam and many commercial banks announced the application of preferential interest rates of 17-19 percent to some subjects of clients, businesses have affirmed that the announced interest rates have not been realistic. Hoang Diem, Director of an agricultural materials import-export company in HCM City, came to a bank earlier this month to learn about the procedures she has to follow when she wants to mortgage the house in BInh Thanh district to borrow capital to import materials for the winter-spring crop. Sacombank has accepted to lend 6 billion dong to her at the interest rate of 20.04 percent. “I can borrow money at 20.04 percent because I am a loyal client of the bank, while other clients would … [Read more...] about Businesses say preferential interest rates do not exist
Businesses, the major driving forces for economic development was among the hottest topics at the National Assembly’s economic-social discussion panel on October 27. Most of NA deputies said that macro-economic stability, curbing inflation would be the top missions in the next few years. They urged the government to redouble efforts on curbing inflation to below 10 percent and shift focus away from a high economic growth target for 2012. However, with this year's annual inflation expected to be 18 percent, compared to nearly 12 percent in 2010, achieving single-digit inflation will be extremely difficult. Vietnam's targeted economic growth for 2012 is slightly higher than this year's growth rate. The country's GDP increase this year is expected at 6 percent, lower than the rate of 6.78 percent in 2010. The index grew by 5.43 percent in the first quarter, 5.67 percent in the second quarter, and 6.11 percent in the third quarter. Deputy Truong Minh Hoang from the southernmost … [Read more...] about National Assembly worries of inflation, interest rate
It is imperative that banks cut their lending interest rates to support businesses, was the message from a meeting held in HCM City between the Viet Nam Banking Association and its members in the southern region on Friday. Though deposit interest rates are capped at 14 per cent, many banks continue to lend at 21-22 per cent. Many companies in the city complain that despite being eligible for preferential loans under the Government's interest rate subsidy programme, they are unable to get them to develop their business. Many banks lent not only at high interest rates but also only for short terms, putting great pressure on businesses, Pham Ngoc Chau, deputy general director of the Hancofood Joint Stock Company, said. The head of a textile and garment company in the city said though the peak shopping season was approaching, the high lending rates and inflation had forced his company to ease off to avoid losses. It is not just manufacturers who are affected by the credit crunch but also … [Read more...] about Banks propose interest rate cuts on loans to businesses