The proportion of loans with interest rates of over 15 percent was 32.8 percent as of July 27, while a mere 1.9 percent was charged with rates of less than 10 percent, said the Monetary Policy Department under the State Bank of Vietnam (SBV).
Meanwhile, 50.3 percent of the total outstanding loans had interest rates of 13-15 percent, and 15 percent of them were levied 10-13 percent rates.
SBV has asked lenders to slash the interest rates for old loans to below 15 percent. So far, only 28 banks have issued guidelines and carried out lending rate cuts upon request of the central bank, said the Monetary Policy Department.
In its recent move, the department proposed that SBV summon the banks yet to do so to the central bank’s headquarters for working with the Banking Supervisory Agency and relevant departments.
According to the proposal, the aim of these meetings is to require commercial banks to “comply with SBV governor’s directive”.
As of July 27, loans with interest rates of more than 15 percent accounted for 32.8 percent, dipping by a half compared to before July 15, according to the reports of 35 credit institutions.
The percentage of outstanding loans with rates of above 15 percent at the four State-run banks Vietcombank, BIDV, Vietinbank and Agribank sharply dropped to 23 percent, versus 61 percent on July 12.
Meanwhile, at 14 commercial joint stock banks, the figure fell to 63 percent, down 13 percentage points against July 12. The proportion of loans with over-15 percent interest rates at 15 foreign bank branches averaged out at 8.8 percent.
Finance companies Prudential and PPF had also reduced interest rates for all loans to less than 15 percent by July 27.
The aforesaid 35 credit institutions are holding a combined 70.7 percent of the credit market shares, said the Monetary Policy Department.
At the government press briefing on Tuesday, the Monetary Policy Department informed as of July 25, credits had inched up 0.57 percent from late 2011. Poor credit growth is the underlying cause of economic downturn in Vietnam.