Since the Lunar New Year, to mobilize people’s idle money, many commercial banks have increased their interest rates on savings by 0.2-0.8% per year, mainly for terms longer than six months. . The move aims to help commercial banks increase their loan capital during the Tet holiday, promote loans and inject a large amount of capital into production and business activities. However, many commercial banks said that a large amount of bank deposits had been shifted to other investment channels with higher profitability, such as gold, securities and real estate. It has forced commercial banks to balance between raising interest rates on deposits to attract capital and keeping lending rates low enough to help businesses weather the pandemic.
In January 2022, credit growth jumped 2.74% compared to the end of 2021, showing a strong increase in demand for capital from the first month of the year. According to the market analysis department of SSI Securities Company, with the prospect of a full reopening of the economy in the coming period, the demand for credit will increase sharply. In addition, inflationary pressure is gradually building, so interest rates on deposits are likely to start rising in the second half of 2022. interest on savings may increase slightly. 0.2 to 0.25% per year relative to the current level of interest rates.
Many recovery plans
Despite the increase in interest rates on deposits, many commercial banks said that the state had stimulated demand for credit, so banks still have preferential interest rate packages for individuals, as well than companies to invest in production and business activities. However, if the State Bank of Vietnam (SBV) tightens its monetary policy, interest rates on loans will certainly be difficult to maintain at the same level as in 2021.
In the meantime, the SBV says monetary policy aims to support businesses and focus on priority sectors for economic recovery in 2022. Specifically, in 2022 and 2023, through the social development and recovery program -economic, there will be a budget package to support 2% of the interest rates on loans, worth about VND 40 trillion through banks. Currently, the SBV is drafting a decree guiding the implementation of this interest rate support program and consulting ministries, sectors and companies. The decree is expected to be published in March 2022.
Specifically, the draft decree stipulates that the beneficiaries of the interest rate subsidy program include companies, cooperatives and business households in the following sectors: aviation, transport and warehousing; tourism; accommodation and catering services; Education and formation; agriculture, forestry and fishing; manufacturing and processing; software publishing; computer programming and related activities; information service activities. Other files are also supported, in particular the purposes of construction of housing for workers, construction of social housing, and renovation of old apartment buildings appearing on the list of projects announced by the Ministry of Construction. The support interest rate for customers is 2% per annum for loans disbursed from January 11, 2022 to December 31, 2023.
To qualify for interest rate subsidy under the Socio-Economic Development and Recovery Program, clients must apply and be approved by the lending bank at the time of disbursement or at the time of signature of the agreement. ‘loan agreement. It should be noted that the SBV draft also sets out specific principles to prevent political profiteering. In particular, if the relevant bodies and units conclude that the client is using the loan for the wrong purpose, the client is obliged to return the amount of the subsidized money to the bank to repay the state budget. This regulation is assessed to prevent companies from using the loans for other purposes, in particular to invest in non-priority areas, such as real estate and securities.
However, some people said that some commercial banks will neglect the support program due to low profits, the pressure of being inspected and having to report regularly to the relevant authorities, and the risk of not being settled.
The head of a commercial bank in Ho Chi Minh City said the most worrying thing for commercial banks today is the settlement procedure for interest rate compensation. The draft decree stipulates that the Ministry of Finance will temporarily provide interest rate compensation to commercial banks on a quarterly basis, the amount of the temporary provision for interest rate compensation being equal to 90% of the sum of money that commercial banks have provided an interest rate subsidy to customers in the neighborhood. “The level of provision needs to be higher, around 95%. Also, settlement terms and procedures need to be more detailed and clear for banks to implement as many cases are eligible for the interest rate support program from 2009 but so far , many banks have not completed settlement,” he suggested. .
Meanwhile, according to a representative of the Vietnam Association of Small and Medium Enterprises, the biggest concern of companies is that they are not eligible to access the above interest rate support program because banks companies said they would not lower the standard for this support. package to ensure safety for them. Meanwhile, currently up to 90% of businesses are facing difficulties, and the health of many businesses has been severely affected or even depleted due to the prolonged Covid-19 pandemic. Consequently, the tightening of credit conditions will make it very difficult for companies to access the support system.