Deposit interest rates "plummet", loan interest rates at banks remain high

While the deposit interest rates of banks have decreased sharply, the reduction in lending interest rates has not been significant. This has greatly affected the production, business and consumption activities of people and enterprises in Ha Tinh.

Recently, banks in Ha Tinh have simultaneously reduced deposit interest rates. In particular, in the first half of August 2023, many joint stock commercial banks such as Techcombank, Bac A Bank, VPBank, Sacombank... continued to reduce savings interest rates, bringing the highest rate to over 7%/year. Thus, compared to the peak period at the end of last year, savings interest rates have now decreased by 3-4%/year, especially for terms of 6 months or more. According to the review, the deposit interest rate level has now returned to the lowest level in more than 1 year.

The decrease in bank lending interest rates is not commensurate with the decrease in capital mobilization interest rates.

According to the reflection, the mobilization interest rate “plummeted”, but the lending interest rate of credit institutions has not decreased proportionally. Currently, the lending interest rate level is still high, causing difficulties for customers.

Ms. Luong Thi Tuyet - General Accountant of MTV Garment Export Joint Stock Company (Bac Cam Xuyen Industrial Park) said: "The unit specializes in processing and exporting labor protection products to the Japanese market and fashion products to the US, India... The global economic recession as well as increased production costs have greatly affected the production and business activities of the enterprise. However, we are still having to bear high lending interest rates. The unit is borrowing tens of billions of VND at Vietcombank Ha Tinh with a medium-term loan package, interest rate over 10%/year and a short-term loan package with interest rate over 8%/year. This is not commensurate with the current trend of decreasing deposit interest rates".

Production line at MTV Export Garment Joint Stock Company.

Hung Thuan Aquaculture and Environmental Sanitation Cooperative (Mai Phu Commune, Loc Ha) is raising 20 hectares of commercial clams and 15 hectares of clam seeds in Loc Ha and Thach Ha districts. In recent years, the cooperative has borrowed capital from banks to invest in expanding the area. Since the beginning of the year, the lending interest rate has gradually increased, greatly affecting the unit's operations.

Mr. Le Xuan Hung - Director and Chairman of the Board of Directors of Hung Thuan Aquaculture and Environmental Sanitation Cooperative said: “2023 is a difficult year when the consumption market declines, the price of commercial clams is much lower than previous years; meanwhile, lending interest rates at existing banks have decreased, but the decrease is not commensurate. Due to high interest rates (over 8%/year), the Cooperative has just had to find a way to pay 3 billion VND to Agribank Loc Ha district. The remaining debt balance (250 million VND), the unit will also try to pay as soon as possible".

According to Mr. Le Xuan Hung, the output of commercial clams is difficult, the cooperative is currently planning to invest in a high-tech shrimp farming model. The unit hopes that banks will continue to reduce lending interest rates to access capital for investment in production and business, create stable jobs for workers and increase revenue.

With narrowed output and low prices for commercial clams, Hung Thuan Aquaculture and Environmental Sanitation Cooperative is considering changing production direction.

For consumer loan packages, people are also struggling as bank loan interest rates drop "drop by drop". Ms. Nguyen Thi Tam (Ha Tinh City) shared: "At the beginning of 2021, my family borrowed 350 million VND to buy a car with an interest rate of over 7%/year. Since the beginning of 2023, loan interest rates have continuously increased, at times reaching nearly 12%/year, so the car loan debt has become a burden for the family. Currently, the loan interest rate has dropped to 10%/year, but I see that this interest rate level is still high, I suggest that banks continue to reduce it to support people".

Since the beginning of the year, the State Bank of Vietnam (SBV) has lowered its operating interest rates four times. Accordingly, the input interest rates of banks have cooled down quickly and strongly. However, the decrease in lending interest rates has been slow (currently down 1-2%/year compared to the beginning of the year) and the decrease has not been uniform across sectors.

It is known that on August 14, 2023, the State Bank of Vietnam (SBV) issued Document 6385/NHNN/CSTT to credit institutions and foreign bank branches requesting them to continue implementing solutions to reduce interest rates according to the direction of the Prime Minister. Accordingly, the SBV requires credit institutions to reduce lending interest rates for existing outstanding loans and new loans, striving to reduce interest rates by at least 1.5-2%/year.

To continue stabilizing the market, credit institutions need to have solutions to reduce lending interest rates at a proportionate level to support people and businesses to recover and develop production and business in a difficult context.

People borrowing consumer loans are having difficulty because lending interest rates are still high.

In the past, credit institutions in Ha Tinh strictly complied with the regulations on interest rate management of the Governor of the State Bank of Vietnam, there was no phenomenon of unfair competition or exceeding the ceiling.

As of July 20, 2023, the interest rate for mobilizing VND deposits is at 0.1 - 0.5%/year for demand deposits and deposits with terms of less than 1 month; 3.4 - 4.75%/year for deposits with terms from 1 month to less than 6 months; 5 - 6.8%/year for deposits with terms from 6 months to less than 12 months; 6.3 - 7.8%/year for deposits with terms of 12 months or more. The interest rate for mobilizing USD is at 0%/year for deposits of organizations and individuals.

Short-term VND loan interest rates are commonly 4-10%/year, medium and long-term loans are commonly 9.5-13%/year. Short-term USD loan interest rates are commonly 3.7-4.5%/year; medium and long-term loans are commonly 6-6.1%/year.

Thao Hien - Ngoc Loan

Source: https://baohatinh.vn/thuong-mai-dich-vu/ha-tinh-lai-suat-huy-dong-lao-doc-lai-vay-o-cac-ngan-hang-van-cao/253024.htm