Lending interest rates will remain stable.

Four major banks unexpectedly lowered deposit interest rates by 0.3-0.5%. Many businesses expect that, following this move by the "big players," smaller banks will also lower deposit interest rates to reduce lending rates by the end of the year.

"Can I get my money back if I accidentally transfer it to the wrong bank?"

However, according to economic experts, the current reduction in deposit interest rates is not enough to bring down lending interest rates. Nevertheless, with increased demand for loans at the end of the year, keeping lending interest rates stable is also a positive sign for businesses.

It's difficult to lower interest rates across the board.

Economist Dr. Bui Quang Tin from the Ho Chi Minh City University of Banking stated that although the four major banks – BIDV, Vietcombank, Vietinbank, and Agribank – recently reduced deposit interest rates, this is only a temporary measure as the reductions are only for short-term loans.

For smaller banks, a move to lower interest rates, similar to larger banks, is unlikely, as most of their business operations are currently weaker than those of larger banks. Furthermore, smaller banks face pressure from the requirement to reduce the ratio of short-term capital used for medium and long-term lending, as stipulated in Circular 06/2016, from 60% to 50%. According to Dr. Tin, to prepare for this roadmap, banks will be forced to increase their mobilized capital across all maturities, not just short-term, to continue providing medium and long-term loans.

Furthermore, Circular 36/2014 stipulates that the loan-to-deposit ratio of commercial banks must reach 80%. If they want to increase loans while maintaining this ratio, commercial banks must increase their deposit mobilization ratio to keep the loan-to-deposit ratio at 80%. "Therefore, smaller banks are currently mainly observing the situation and are hesitant to take any action regarding further reductions in deposit interest rates, and a widespread reduction in deposit interest rates is unlikely in the near future," Dr. Tin commented.

Lower interest rates in priority sectors.

Dr. Tin also stated that banks are implementing lending under Government Resolution 35 very well. Therefore, although they have to race to meet their credit growth targets at the end of the year, banks will sacrifice some profits in certain business sectors to maintain stable interest rates for businesses borrowing under Resolution 35, or only slightly increase or decrease interest rates if there are fluctuations in the lending market.

Discussing this issue, several bank leaders affirmed that current medium and long-term lending interest rates have decreased significantly compared to the same period last year. Notably, short-term interest rates have also been sharply reduced by banks. Evidence of this is that since the beginning of the year, not only Sacombank but many other banks have launched numerous Vietnamese Dong loan packages for all businesses, prioritizing small and medium-sized enterprises (SMEs). As for short-term financing for import businesses, banks are also offering loans at interest rates not exceeding 6.5%.

Although interest rates have not yet been reduced, many banks are still maintaining preferential credit packages to help businesses overcome difficulties. Most recently, Agribank allocated 15,000 billion VND with preferential interest rates for priority sectors and good customers with traditional credit relationships with the bank. The bank is also proactively calculating how to maintain appropriate lending interest rates from now until the end of the year for customers; ensuring sufficient capital to meet the reasonable borrowing needs of businesses and the population, especially in the agricultural, rural, and farmer sectors.

Another financial expert analyzed that the short-term lending interest rate in Vietnamese Dong, applied by banks at no more than 7% per year for five priority sectors, is proving effective. Accordingly, banks can expand the application of this low interest rate to other sectors with development potential.

Hai Yen - Minh Phuong/baotintuc