May 6, 2012

Vietnam - Cbank sets 15 pct lending rate cap to aid firms


The State Bank of Vietnam (SBV) yesterday issued a new circular, imposing a 15 per cent cap on lending interest rates for four preferential sectors, starting next Tuesday, May 8.

Specifically, the circular stipulates that the maximum interest rate slapped on short-term loans in Vietnamese dong will be equal to the maximum deposit interest rate as required by SBV for terms from one month and above plus 3 percentage points a year.

With the ceiling for deposit interest rate currently standing at 12 per cent a year, the limit to the lending rate will be 15 per cent a year, the central bank said.

Beneficiaries of the lowered rates include businesses operating in the supporting industry, exporting and agriculture sectors, and small- and medium-sized enterprises.

“The administrative solution of setting the ceiling rate has been considered thoroughly and is only applied in a particular context for a particular time,” said SBV deputy governor Nguyen Dong Tien.

“Borrowers operating in the preferential sectors are also required to meet certain conditions such as business effectiveness and repayment ability to access loans.”

Tien also told newswire VnExpress that the central bank will try its best to curb the phenomenon of breaching the ceiling rate.

“Yet it’s hard to confirm that there will be no violations,” he admitted.

In related development, the central bank yesterday delayed the ban on gold mobilization at credit instructions by 7 more months.

Earlier it was scheduled that banks are no longer allowed to accept gold deposit as of May 1.

“The extension is released given the current context of the economy and market fluctuation,” said Tien.

Tuoi Tre

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