No one can say for sure that commercial banks would accept the loan
interest rate of 15 percent per annum to be applied for the old debts, even
though this is the instruction given by the State Bank of Vietnam (SBV).
The central bank has instructed
commercial banks to apply the interest rates of no more than 15 percent per
annum to the loans, which were signed before between banks and clients at high
interest rates. The interest rate reduction must be completed prior to July 15.
Waiting in doubt
The decision has been made by the
central bank in an effort to rescue Vietnamese businesses, which have got
exhausted because of overly high interest rates and big inventories. However,
businesses still have doubts about the feasibility of the decision.
A businessperson said commercial
banks would not accept to lower interest rates unconditionally. Meanwhile, not
all businesses can satisfy the requirements set by the banks in order to be
able to enjoy the low interest rates.
There is an immutable principle
that banks have to follow that they would not accept to ease the interest rates
of the loans provided before to the enterprises which have overdue debts, or
have “problematic” mortgaged assets.
In order to reduce the old loans’
interest rates to below 15 percent per annum, banks would have to cut down
their expenses (operation costs, capital costs) and increase the income from
non-credit activities.
Besides, there is another
important reason which may make the interest rate reduction impossible.
However, no bank would dare to complain about this. Commercial banks lent at
high interest rates in the past, because they had to mobilise capital at high
costs. However, they have been forced to slash the interest rates for the
previous loans, which means that they would incur loss because they bought high
and now sell cheap. Who would compensate their losses?
Nguyen Viet Hai, director of a
Construction Company in Hanoi said that he has contacted some commercial banks
to ask about the interest rate reductions right after the central bank’s
decision was released, but he has been told to wait.
In fact, Hai does not believe
that his old debts can enjoy the low interest rates of less than 15 percent,
simply because he has to pay 18.5 percent for the new loans.
Nevertheless, the central bank’s
decision has been applauded by a modest number of businesses.
Trinh Ngoc Son, President and
general director of Nghe An Trade Joint Stock Company, said the lower interest
rates would certainly help businesses reduce their production costs and make
more competitive products.
Son has his reasons to keep
optimistic about the effects of the decision. His company usually borrows short
term loans and it usually pays debts on schedule. Therefore, he believes that
he would be able to enjoy the low interest rates.
Regarding the complaints by some
businesses that the new interest rate would still be inaccessible for them, Son
said the businesses would get indirect benefits. Once a business can enjoy low
interest rates, it would be able to make products at lower production costs,
thus benefiting the satellite companies and their partners as well.
Interest rate reductions will not help much
Both bankers and the business
circle think that interest rate is no more the biggest problem for enterprises.
A lot of banks are ready to provide loans at low interest rates, but businesses
dare not borrow money, unless they can be sure that they can sell products.
Meanwhile, Bui Kien Thanh, a well-known
economist, has commented though this is a good idea to slash interest rates for
the old debts, everything would still depend on commercial banks.
VietNamNet
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