HCMC – Many large commercial banks have continued lowering deposit rates for various tenors aimed at reducing lending rates to support businesses and residents affected by the coronavirus pandemic in line with the directives of the prime minister and the State Bank of Vietnam.

The Bank for Foreign Trade of Vietnam (Vietcombank) has cut the deposit rates of one and two months to 3.5% per year, down 0.2 percentage points compared to the beginning of August, Nguoi Lao Dong Online reported.

The lowest rate at 3.5% per year for one- or two-month tenors is also being applied at Agribank, BIDV and Vietinbank.

Vietcombank has also reduced the rate for nine-month deposits to 4.5%, down 0.1 percentage point. The bank is offering the highest rate at 6.1% per year for savings of 24 months.

At Agribank, the interest rates for savings of nine to 11 months are now 4.4% per year, down 0.1 percentage point compared to the rate in early August.

The deposit rates for tenors of 12 months and longer at Agribank, Vietinbank, BIDV and Vietcombank, which are State-owned lenders, are hovering around 6% per year.

The lowest rate for short-term deposits is being applied at Techcombank, which is offering a rate of 3.15% per year for savings of one month.

Customers depositing less than VND300 million for tenors of one or two months at VPBank, a private bank, will receive an annual rate of 3.5%, equivalent to the rate offered by the State-run banks.

A representative of Vietcombank noted that deposit and lending rates are applied based on the demand in the local market and the State Bank of Vietnam’s directive to help administer the monetary policy.

The deposit rate cuts followed low credit demand due to the impact of the Covid-19 pandemic. The demand from firms for loans has dropped, while liquidity at banks remains abundant.

Statistics from the central bank indicated that as of July 31, the credit growth of the banking system stood at 4.03% while capital mobilization rose by 5.7% against late 2019.

HCMC saw loans expand 3.66% as of July 31, while capital mobilization of credit institutions in the city advanced 3.96% against the figure seen in late 2019, according to the State Bank of Vietnam’s HCMC branch.

Le Minh Hung, governor of the State Bank of Vietnam, last weekend urged commercial banks to reduce operating costs, cut salaries and bonuses and extract profits to continue slashing lending rates. The move is aimed at helping businesses and residents overcome the hardship and contribute to the economic recovery.