The governor of the central bank, Nguyen Van Binh, has committed to keep lending rates at 15% a year for at least one year and to do his best to ensure interest rate stability for a couple of years to pull the economy out of the doldrums.
?As the governor of the State Bank of Vietnam, I reassure you that the lending rate of 15% will be kept stable for at least one year and we will try to ensure rate stability in the future,? Binh told business executives at a dialogue held by the central bank and Hanoi City last Friday.
Binh attributed his commitment to the fact that the national inflation only stays at 7-8% this year, allowing commercial banks to push lending rates down below 15% as targeted. ?The orientations and measures to lower the rates below 15% are very clear and what we are doing now is to turn it into reality,? Binh responded to firms that urged SBV to order member banks to conform to the rate cut.
Thu Ha, director of Lexim, which specializes in trading construction machinery and equipment, said local banks have lent to her business at an annual rate of up to 24% in 2010-2012. Therefore, she insisted lending rates should be slashed to 15% and should remain unchanged for at least one year.
Ha noticed Eximbank already adjusted down its lending rate to less than 15% at the governor?s request but she wondered how long the rate will stay there.
Tran Anh Vuong, representative of the Hanoi Youth Business Association, expressed his concerns over whether the central bank?s instruction that forces lenders to lower interest rates of old loans to 15% could work.
?I suggest the governor should announce the addresses and phone numbers of relevant authorities so that local companies could inform them of any problems that arise,? Vuong said.
Governor Binh admitted a specific ceiling lending rate is not mentioned in the prevalent regulations. ?SBV has only called on commercial banks to lower rates for old loans to help corporate borrowers get out of the woods. This means the monetary authority cannot punish violators, if any, based on the current legal system.
?The point is we must be fully aware of social responsibility as banks are supposed to reduce interest rates as soon as conditions allow them to do that.?
Only five days after the central bank released the instruction on rate cuts, most credit institutions in the country have pledged to do as told.
He asserted: ?We declare the banking system will only strive for credit growth of 8-10% as the increase is appropriate and would not cause inflation in the years to come.?
Nguyen Thi Mai Suong , director of the Hanoi Branch of the central bank, noted all 12 commercial banks and eight finance leasing companies based in the capital city and branches of State-owned lenders had revised down old loans rates to a maximum of 15%.
According Suong, banks in Hanoi have already reduced rates for 30-50% of the old credit contracts with rates of over 15%. At two State-run banks, Vietcombank and BIDV, interest rates for all credit contracts have went down below 15%, Suong said, adding other lenders in the city are racing to complete their rate cuts this month.
The Saigon Times Daily