SCB raises non-term interest rates to 9 per-cent

Tuesday, May 13, 2008
Saigon Joint Stock Commercial Bank (SCB) has increased its VND non-term deposit interest rates from 3.6% a year (0.3% a month) to 9% a year (0.75% a month).
Non-term deposit often has low interest rates, not above 30% of term interest rates.
However, some banks pushed non-term interest rates to 3.5-4% a years because of lacking capital. SCB’s new interest rates will be 70% of term interest rates.
According to banks, raising non-term interest rates helps limit money withdrawal because only person and businesses with frequent commodity purchases choose non-term deposits. Due to recent limits on interest rates, banks have to race to increase short-term interest rates.