VietNamNet Bridge – Just several days ago, when some banks offered the sky high
deposit interest rate of 14 percent per annum, people thought that this would be
the peak. However, they were wrong: interest rates have climbed to 17 and then
18 percent. Meanwhile, the State Bank of Vietnam believes that the current
interest rates are unreasonably high and has requested commercial banks to apply
“reasonable interest rates”.

Following the move, SeABank, which has always been leading in the interest rate
war, once again surprised people by offering a higher interest rate of 18
percent for deposits.
However, the new interest rate offered by SeABank would only exist for a short
time. Four hours after the new interest rate was announced, the bank had to
slash it to 14 percent.
Meanwhile, according to VnExpress, by late afternoon of December 8 Techcombank
had not released any announcement about interest rate adjustments, even though
the central bank had requested commercial banks to offer “reasonable interest
rates”.
Commercial banks are angry and criticize Techcombank for triggering a new nd
more serious interest rate war.
An official from the State Bank of Vietnam also said: “It is Techcombank which
ignited the interest rate war, prompting other commercial banks to raise the
deposit interest rates to over 17 percent”.
“Techcombank says it needs to raise deposit interest rates in order to attract
more capital. But we are sure that Techcombank does not have any difficulties in
capital sources to have to mobilize capital at such high interest rates,” the
official continued.
A senior executive of a state-owned bank complained that he has become too busy
answering calls from the bank’s branches asking about the interest rate policy.
“The branches complained that people are trying to withdraw money from the bank
and deposit at other banks to enjoy higher interest rates,” he said. “The
branches ask me to raise deposit interest rates in order to retain depositors. I
do not have time for meals”.
The branch of a state-owned bank located on Thai Thinh street in Hanoi was very
crowded yesterday, but officers were not happy. An officer here said most of the
clients came to withdraw money. Especially, a client withdrew five billion dong
from the bank branch late yesterday afternoon.
Le Duc Tho, Deputy General Director of Vietinbank, a large state-owned bank,
though affirming that the bank’s capital is still profuse, said that if the
capital continues flowing out of the bank to other banks, “we will have to take
necessary measures to retain clients”.
However, he believes that if banks pay 17 percent or more per annum for
deposits, they will not be able to generate profit and will face high risks.
Nguyen Thanh Toai, Deputy General Director of Asia Commercial Bank, also thinks
that the move by some banks to raise the deposit interest rate to over 17
percent is a “dangerous move”.
The State Bank of Vietnam has to take actions to intervene in the market. An
urgent meeting was gathered in the afternoon of December 8, where the bank asked
commercial banks to adjust the interest rates and offer “reasonable interest
rates”. The representative from the central bank affirmed that banks have raised
deposit interest rates not because of the capital shortage.
As Tet nears, the overly high interest rates applied by banks have pushed many
businesses against the wall. Representative from a wooden furniture enterprise
in HCM City said that last month, he had to borrow money at 15 percent per
annum. Meanwhile, the lending interest rate has jumped to 16-19 percent which
has become unbearable.
Dr Tran Hoang Ngan, Deputy President of the HCM City Economics University also
believes that the current interest rates are abnormally high. He said reasonable
deposit interest rates are 13-14 percent per annum, while reasonable lending
interest rates are 16-17 percent.
C. V