Nearly 100% of banks raise interest rates

Friday, May 2, 2008
On April 29, at the same time the Viet Nam Banking Association released an announcement on adjusting the negotiated ceiling interest rate among its members, many banks applied new interest rates.
By the end of April 29, most of the banks belonging to the 38 members of the Viet Nam Banking Association announced they would raise interest rates to the ceiling level, bringing the interest rate on VND deposits to 11.5%/year for deposits of less than 6 months and 12% for deposits of over 6 months.
12% is the ceiling level defined by the State Bank of Viet Nam in late February 2008.
Oriental Commercial Bank (OCB), Viet A Bank (VAB), Saigon-Hanoi Bank (SHB), Southeast Asia Bank (SeABank), Techcombank, VPBank, Sacombank applied the above interest rates.

Notably, state-owned commercial banks quickly joined the game. Vietinbank announced it will increase the interest rates on 7- and 9-month bills to 12% a year as of May 1, 2008.

The Bank for Investment and Development of Viet Nam (BIDV) also stated it will apply the maximum interest rate of 12%/year as of April 29.

According to the Vietnam Banking Association, the adjustment of interest rates aims to ensure positive real interest rates under the government’s instruction. (TBKTVN)