Speaking at the conference on promoting bank credit, contributing to promoting economic growth in Region 4 (Phu Tho, Vinh Phuc, Ha Giang, Tuyen Quang, Lao Cai, Yen Bai) on the afternoon of March 11, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu affirmed that the SBV always ensures liquidity for commercial banks, so banks do not need to compete on deposit interest rates to attract deposits.

Previously, at the end of February, there was a phenomenon of banks racing to increase deposit interest rates, causing the Prime Minister to request the State Bank to inspect and examine these banks.

“Banks need capital and liquidity, so they have to increase deposit interest rates for lending. However, in this case, we are more flexible in using business tools, especially refinancing tools as well as participating in the interbank market to solve capital in the secondary market. Only when it is really necessary will we increase deposit interest rates,” said the Deputy Governor.

The representative of the State Bank of Vietnam affirmed that the operator will continue to operate interest rates stably and in a downward direction. In fact, interest rates in the OMO market have decreased in the past two days. However, the appropriate reduction level also needs to be carefully calculated.

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Deputy Governor of the State Bank of Vietnam Dao Minh Tu speaks at the conference. Photo: MA

“The State Bank will also study how to reduce interest rates appropriately. Not all reductions are good because interest rates are also related to exchange rates. Deep reductions in deposit interest rates will not attract depositors to banks.

On the contrary, if the mobilization interest rate increases, it will lead to an increase in the lending interest rate, which will not support businesses and will not achieve macroeconomic goals," said Deputy Governor Dao Minh Tu.

In the immediate future, the State Bank of Vietnam aims to stabilize the deposit interest rate and gradually reduce the lending interest rate. This is also a resolute direction of the State Bank of Vietnam and will soon be included in the business plans of the four state-owned commercial banks (Agribank, BIDV, VietinBank, Vietcombank), forcing these banks to cut many costs to create conditions for reducing interest rates. This group of four banks alone accounts for about 50% of the market's lending market share.

“Once the four state-owned commercial banks have deeply reduced interest rates, private commercial banks cannot stand aside, even small banks must also reduce their interest rates,” the Deputy Governor emphasized.

“Of course, the interest rate issue is the right of commercial banks because it is the price of goods, banks have the right to determine the interest rates for deposits and loans. But in general, as our people often say, ‘eat while watching the pot, sit while watching the direction’,” he noted.

In addition to calling for interest rate reduction, the State Bank also uses administrative measures to force commercial banks to always publicly disclose lending interest rates.

Transparency in lending interest rates will create fair competition in interest rates, making it easier for businesses and people to choose.

With the credit growth target of 16% in 2025, the State Bank encourages credit institutions to increase lending. If the credit room of 16% is achieved while still ensuring inflation control and banks remain stable and healthy, the State Bank is still ready to further expand credit growth.