Balance on interbank lending account currently at about 500tr dong: Nghia

The balance on interbank lending account is currently at about 500 trillion dong, the local newspaper Saigon Dau Tu while quoting Le Xuan Nghia, vice chair of the National Financial Supervisory Committee, said.

Meanwhile, there is still not statistics on balance on deposit accounts amongst credit institutions, but according to Nghia, the deposit balance is much bigger than the loan balance.

Not long ago, the State Bank of Vietnam (SBV) has required credit institutions to report some information on lending, deposits, borrowing, receiving deposits and investing in bonds.

The central bank’s requirement on reporting lending situation in the interbank market is noticeable when recently; the interbank market has had turmoil, which limited the role of capital regulation for the commercial banking system.

An official from the central bank said that the figure of 500 trillion dong did not flow into the economy but flow into the commercial banking system, pushing up the interest rate in the interbank market higher. The official also added that commercial banks also have many bad debts on the interbank market.

On February 8, the lending interest rate for 3-month term in the interbank market was commonly at 18.5-19 percent per annum (p.a.) 2-month term at 16.5 percent p.a. But many large commercial banks said that with these interest rates, smaller banks wanting to borrow interbank loans must have collaterals in gold, foreign currencies or valuable papers.

Meanwhile, large commercial banks are invited to borrow at the interest rate of 12.13 percent p.a, but transactions are not active.
Asia Commercial Joint Stock Bank (ACB)’s deputy general director said that the interbank market after Lunar New Year (Tet) holiday is no longer intense as before Tet but the lending activities amongst banks to each other are more wary.

 

Category: Finance