The State Bank of Vietnam (SBV) has requested commercial banks to reduce lending interest rates as per previous commitments.

Under recently released Official Dispatch No. 5901/NHNN-TD, the SBV requires the interest rate cut and free banking service provision to support customers affected by the COVID-19 pandemic.

SBV’s Deputy Governor Dao Minh Tu said the central bank would strengthen supervision of the implementation of the dispatch.

Accordingly, the governor has directed the chairmen of the board of directors and the general directors of commercial banks to take responsibilities towards society and join forces with the Government to repel the pandemic and support people, businesses and the economy to overcome difficulties through effective and practical solutions such as reducing interest rates and fees.

Tu called for commercial banks to meet their commitments on reducing lending rates, which they had registered with the Vietnam Banks Association in Official Dispatch No. 248/NHNN-PLVN dated July 16, 2021, to maintain the reputation of each bank and the whole banking industry.

The latest dispatch of the SBV noted that the implementation of programmes to reduce interest rates and service fees should be substantive and effective with specific results. Banks must make public their policies and inform customers specifically about the policy of reducing interest rates and service fees so that customers can access the banks' support policies.

The SBV said it would make public the implementation results of each bank's commitments in the media every month. Besides, it would strengthen supervision of the commitments of the entire commercial banking system and each commercial bank branch in provinces and cities nationwide.

According to Tu, besides restructuring due debts and interest, and keeping the debt classification unchanged, lowering interest rates is one of the most practical and specific solutions to supporting businesses right now. Since the latest outbreak of the pandemic, commercial banks made interest rate cuts worth about VND18.83 trillion for businesses, according to preliminary statistics.

Following the direction of the Government and the Prime Minister, the SBV has directed commercial banks to share responsibility and accompany businesses by further reducing interest rates after trying to minimise operating costs and reducing their own profits.

The SBV noted commercial banks are also businesses, but at this time, sharing with businesses and the people is the common responsibility of the whole of society, each bank and each bank employee.

Previously, under the SBV’s direction, the Vietnam Banks Association held a meeting with the participation of 16 commercial banks who voluntarily agreed to cut interest rates of about VND20.3 trillion from now until the end of this year, depending on the size of the bank, to support the economy.

Besides the general support package, four large State-owned commercial banks - Vietcombank, VietinBank, Agribank and BIDV - promoted a pioneering role in the banking system, committing to make a further interest rate cut worth about VND1 trillion each to aid businesses and people in HCM City, Binh Duong and other cities and provinces that have been facing the most difficulties due to the pandemic.

The four banks will also offer free fees for all banking services for people and businesses in the localities.

Besides interest rate cuts, the SBV has also been directing credit institutions to reduce fees for payment, money transfer and other credit and monetary services for businesses, in a package which has been estimated to be worth about VND1.1 trillion to date. — VNS