The Ministry of Health and the World Health Organisation jointly held a meeting in Hanoi on May 25 to mark the World No Tobacco Day (May 31) and launch the National No Tobacco Week (May 25-31).
|Customers deposit money at Techcombank, which raised the deposit rate higher than 17% per year on Wednesday morning before backing off from the race - Photo: Thuy Trieu|
Ho Huu Hanh, director of the State Bank of Vietnam’s HCMC Branch, told the Daily that the central bank on Wednesday afternoon had sent documents asking the HCMC Branch to name those banks offering deposit rates over 14% per year. The disciplinary measure, if any, is not elaborated.
Hanh immediately dispatched four groups on Wednesday to look at deposit rates at banks in the city.
“The (punitive) measures to those banks will be given later,” he said.
Some banks had earlier sent messages to customers offering deposit rates of 17% or more.
The general director of a small joint-stock bank told the Daily that he permitted staff to offer negotiable rates of up to 17% with customers, but this level was not made public. Meanwhile, the CEO of another bank headquartered in District 1 said that the negotiated deposit rate at his bank was even higher than 17% per year.
Those leaders said that the capital demand at this time was normal, but they had to raise rates to keep customers. One banker explained that maybe other banks had to mobilize more funds to meet requirements in Circular 13 on safety ratios.
The gesture by the central bank is taken seriously by commercial banks, who understand that their operations such as applications to open new offices would face difficulties if they are black-listed by the central bank.
An online newspaper on Wednesday morning reported that Techcombank had raised its deposit rate to higher than 17% per year, only to see other banks following suit as the deposit rate was later Wednesday spurred up to 18% per year. However, after the warning by the central bank against its high rate, Techcombank has lowered its deposit rates in the afternoon to the previous level.
At this time, most banks quote deposit rates in Vietnam dong at around 13%-14% per year.
The current situation is similar to 2008 when the deposit rate surged to 19% per year. However, the 2008 inflation rate was higher than 20% while it was still less than 10% in the January-November period.
Ho Huu Hanh from the central bank’s HCMC Branch remarked that those banks which increased deposit rates to sky-high levels must have had certain problems. Meanwhile, Duong Thu Huong, general secretary of Vietnam Banks Association, said that there was no reason for banks to raise interest rate higher than 14% per year even if this year’s inflation rate was as high as 11.5% per year.
The central bank earlier said that it would supply enough capital for banks to ensure liquidity even if banks do not have valuable papers for joining open market operations. Those banks just need to send credit contracts to the central bank and will receive the support.
However, according to a banker, no bank wants to have capital that way because the central bank would strictly monitor its credit operation later.
Le Tham Duong, head of the business faculty at the HCMC Banking University, commented that the central bank should not intervene in the relationship between banks and customers. However, it can impact the inter-bank market to indirectly influence the deposit rate that banks offer to customers.
“As we face high inflation, we must accept high interest rates but that must be reasonable, at about 14% for deposit and 18% for lending,” he added.
The central bank should pump capital into the inter-bank market to help bring down the interest rate, which is not difficult for the central bank, Duong said.