14:02 | 07/03/2014 Finance - Banking
(VEN) - The status of unmarketable capital still appeared when credit negatively grew in February compared to the same period last year. Commercial banks have made greater efforts to bring capital to the market by preferential credit packages. To overcome difficulties, accelerating public investment to spread capital in the economy is necessary.
Making transactions at the An Binh Commercial Joint Stock Bank
Lowering deposit interest rates
Dinh Khang from Ton Duc Thang Street, Hanoi when going to the bank surprised when bank staff said that short-term deposit interest rates dropped to 6.8 percent per year instead of seven percent per year.
This is not an isolated case. Since the beginning of February, many banks have adjusted deposit interest rates, particularly in the short term, to below seven percent per year because the amount of deposits is increasing while the loan is not much change. For example, at Eximbank, ACB, Sacombank, the current short-term deposit interest rates are lower from 0.1 to 0.3 percent per year compared to 2013. An Binh Bank announced that deposit interest rates from one to three months only reached 6.8 percent instead of seven percent as before. Sacombank adjusted deposit interest rates in one, two and three months to 6.8 percent, 6.85 percent and 6.9 percent, respectively. In terms of Techcombank, its figure reached 6.55 percent, 6.64 percent and 6.84 percent, respectively.
The status of unmarketable capital was also shown quite clearly in the interbank market. The overnight rate fell deeply compared to the time before the Lunar New Year, from over five percent to about 1.5 percent and interest rates of other maturities also declined. Dr. Tran Du Lich from the National Advisory Council for Financial and Monetary Policies said that the liquidity has improved better. Therefore, interest rate reduction is also understandable. However, Dr. Tran Du Lich analyzed that the status of exceeding money and lack of capital continued and could not be terminated early as bad debts were unresolved, the capital absorption of firms as well as the ability of recovering the purchasing power of the market had not improved.
Many commercial banks have launched credit packages for businesses and inpiduals. For example, TPBank announced that they spent VND2 trillion for loan with preferential interest rates from now until the end of May 2014. Businesses can borrow up to 90 percent of the contract value in dollars or dong with interest rates from eight percent per year for dong or 3.8 percent per year for dollars in the first three months. Depending on the business field and purpose, the bank will apply flexible interest rates. After the preferential period, TPBank continues applying reasonable credit interest rates based on saving interest rates regulated by the State Bank of Vietnam.
The fiscal policy should take effect as early as in the first months of the year through increasing public investment to spread capital in the economy in order to stimulate the market and credit growth.
VIB also launched a VND2 trillion package from now until the end of March 2014 for real estate, private business and auto purchase loans with interest rates from 9.99 percent per year in the first 12 months with a loan of over VND1 billion or 7.77 percent per year in the first three months.
According to an expert in the financial sector, credit packages with preferential interest rates were not an effective solution to increase credit and stimulate economic growth. The slowly increasing trend of credit in the first months of the year is always popular because enterprises do not have capital needs. It is necessary to implement fiscal policy by accelerating public investment to balance capital and directly support for the economy./.
By Duy Minh