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Vietnam banks race to push up dong deposit rates

Commercial banks in Vietnam have started a new race for deposit interest rates with several increasing their rates close to the regulated lending cap, local news agency VNS reported.

The lending rate to corporate customers is capped at 150 percent of the base rate fixed by the State Bank of Vietnam. At the current base rate of 7 percent, the highest lending rate that can be offered by commercial banks is 10.5 percent.

The HCM City Housing Development Bank (HD Bank) pushed up its highest deposit interest rate to 10.3 percent last Thursday.

It was followed by the Phuong Dong or Oriental Commercial Bank (OCB) which last Friday increased its rates by 0.1-0.2 percent, depending on different terms, to push its highest rate to 9.8 percent.

Others, like An Binh Bank (ABBank) and Sai Gon Commercial Bank (SCB) chose to lift the rates on short-term deposits. The ABBank pays 8 percent per year for one-month deposits, up 0.1 percent while the SCB has added between 0.3 and 0.8 percent for one to three-week deposits for annual rates of 6 -7 percent.

Several other banks are offering other incentives for deposits. The Asia Commercial Bank (ACB) is running a promotional programme until the end of October that gives an extra interest rate of up to 0.2 percent per year, depending on the deposited amount.
 

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