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Vietnamese commercial banks urged to meet their rate cut commitments

The State Bank of Vietnam (SBV) has asked commercial banks to reduce interest rates on loans in line with previous commitments.

As part of the recently released Official Dispatch # 5901 / NHNN-TD, the SBV is demanding lower interest rates and the provision of free banking services to support customers affected by the Covid-19 pandemic.

SBV deputy governor Dao Minh Tu said the central bank would strengthen oversight of the dispatch’s implementation.

As a result, the governor called on board chairmen and chief executives of commercial banks to take responsibility for society and join forces with the government to fend off the pandemic and help people, businesses and l ‘economy to overcome the difficulties through effective means and practical solutions such as reducing interest rates and fees.

Tu called on commercial banks to respect their commitments to reduce lending rates, which they had registered with the Association of Banks of Vietnam in the official dispatch No. 248 / NHNN-PLVN of July 16, in order to maintain the reputation of each bank and of the banking industry as a whole.

The latest SBV dispatch noted that the implementation of programs to reduce interest rates and service charges should be substantial and effective with specific results. Banks should make their policies public and specifically inform customers about the policy of reducing interest rates and service charges so that customers can access bank support policies.

The SBV said it would publish the results of the implementation of each bank’s commitments in the media on a monthly basis. In addition, it would strengthen the oversight of the commitments of the entire commercial banking system and each commercial bank branch in the provinces and cities of the country.

According to Tu, besides restructuring debts and interest owed and keeping the classification of debts unchanged, lowering interest rates is one of the most practical and specific solutions to support businesses at this time. Since the last outbreak of the pandemic, commercial banks have cut interest rates of around 18.83 trillion dong ($ 830 million) for businesses, according to preliminary statistics.

Following the directives of the government and the Prime Minister, the SBV asked the commercial banks to share the responsibility and to support the companies in further reducing interest rates after trying to minimize operating costs and reduce their own. profits.

The SBV noted that commercial banks are businesses too, but at present, sharing with businesses and people is the common responsibility of the whole of society, of every bank, and of every bank employee.

Previously, under the leadership of SBV, the Association of Vietnamese Banks held a meeting with the participation of 16 commercial banks who voluntarily agreed to cut interest rates by around 20.3 trillion dong by the end. this year, depending on the size of the bank, to support the economy.

In addition to the general support program, four major public commercial banks – Vietcombank, VietinBank, Agribank and BIDV – have promoted a pioneering role in the banking system, pledging to make a further cut in interest rates of around $ 1 trillion. dongs each to help businesses and individuals. in Ho Chi Minh City, Binh Duong and other cities and provinces that have faced the most difficulties due to the pandemic.

The four banks will also offer free fees for all banking services to individuals and businesses in the localities.

In addition to the interest rate cuts, the SBV has also ordered lending institutions to reduce fees for payment, money transfer, and other credit and monetary services for businesses, in an estimated total of around 1 100 billion dong to date.

VIET NAM / ASIA NEWS NETWORK


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Ruben V. Albin

The author Ruben V. Albin