HCMC – Plenty of small banks are making every effort to mobilize capital so as to overcome liquidity problems caused by surging withdrawal demand of enterprises to settle public debts, payrolls and bonuses ahead of the Lunar New Year holiday.
These credit institutions have deployed all possible means, including mobilizing gold and different foreign currencies as collateral for borrowing funds on the inter-bank market.
Gold has been gradually mobilized at a higher interest rate from time to time over the past three months. Most banks offered gold interest rate of below 1% per year in the middle of last October but it topped 2% per annum for one-month term or even 3.5% per annum quoted by Saigon Commercial Bank currently. Local media also reports a bank chasing up the gold interest rate to a sky-high 4.35% for gold deposits longer than six months.
Aside from gold, the interest rate on foreign currencies such as Euro, and Australian and Canadian dollars has climbed up to 4% per annum compared to the previous rate ranging from 0.1% to 0.5% per annum.
Many banking specialists asserted a surge in gold and foreign currencies interest rates results from the fact that small banks use gold and these currencies as mortgage to borrow Vietnam dong on the inter-bank market to offset liquidity.
“Since numerous banks have delayed settling their debts on the inter-bank market, several major banks request their peers to mortgage assets in gold,” said the general director of a HCMC-based bank.
Some other banks even mobilize Vietnam dong exceeding the 14% ceiling interest rate despite the strictly-enforced cap. The director of an agro-product company said there have been two banks offering him an interest rate of 16-18% for deposits of over VND500 million at one-month term.
However, the deal must be kept secret. Normally, a bank executive will cut the deal with customers at the formal rate of 14%, and give the difference to the client as soon as deposits are made.
As of end-October last year, total capital mobilization increased by 8.4% against the year-earlier period, or an average monthly increase of 0.84%, only one-fourth compared to that of 3.1% in the preceding year, according to statistics from the central bank.
.jpg)