Banks have reduced over VND8.8 trillion of loan interest, equivalent to 43pct of commitment

22-Sep-2021 Intellasia | NDH | 7:07 AM Print This Post

According to information from the State Bank of Vietnam (SBV), as of August 31st, credit institutions (CIs) have exempted, lowered interests for over 1.13 million customers with outstanding loans of over 1,580 trillion dong. The new loans with lower interest rates than the pre-pandemic period granted from January 23rd 2020 until now reached 4,460 trillion dong for 628,662 customers. From January 23rd 2020 to August 31st 2021, the total interests that CIs have exempted and reduced for customers was about 26 trillion dong.

The total interests cut as committed by 16 banks from July 15th 2021 to August 31st 2021 was 8.865 trillion dong, accounting for 43.01 percent of the commitment. Previously, 16 banks, which account for 75 percent of the total outstanding credit to the economy, through the Vietnam Banks Association, agreed on the principle of further lowering lending interest rates by one percent per annum on the existing outstanding loans of the economy in dong in the last five months of 2021 for customers hit by the Covid-19 pandemic.

These banks agreed to lower lending interest rates from July 15th to the end of 2021 with an estimated interest reduction of 20.613 trillion dong. The four state-owned banks continued to commit to a separate support package of four trillion dong for cutting lending interest rates, lowering banking service fees during the social distancing period for customers in localities that are implementing total isolation according to Directive 16/CT-TTg of the prime minister.

Regarding interest rates, the SBV has made three interest rate adjustments in a row with a total reduction of 1.5 two percent per annum on the operating rates, and 0.6 one percent per annum on the ceiling savings interest rates for terms of less than six months,1.5 percent per annum on the ceiling short-term lending interest rates for priority areas (currently at 4.5 percent per annum). The agency is also willing to support liquidity for CIs, creating favourable conditions for CIs to access financial resources from the SBV at a lower cost. Thereby, banks can reduce lending interest rates to support customers to restore production and business activities.

As a result, the lending interest rates decreased by about one percent in 2020 and this trend continued in the first half of 2021 with a decline of about 0.55 percent per annum, totalling a decrease of 1.55 percent per annum compared to before the epidemic.

 

Category: Finance, Vietnam

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