Vietnamese PM orders intensified efforts to cut lending rates

The government had earlier directed the State Bank of Vietnam (SBV) and financial institutions to ease borrowing costs and help businesses expand production. Despite that, some commercial banks recently raised deposit rates, pushing up lending rates.

To address this, the prime minister instructed the SBV to immediately inspect and monitor banks that have increased deposit rates and ensure compliance with legal regulations and governmental policies, a domestic news agency reported.

Violators will face strict penalties, including possible credit growth limits and license revocation.

The central bank has been asked to submit its findings by February 28.

It was also tasked with closely supervising interest rate movements and taking decisive steps to lower lending rates, ensuring businesses and individuals can access affordable credit to drive production, stabilise the economy and control inflation.

Financial institutions were directed to cut operational costs, streamline procedures, adopt technology, and restructure operations to enhance efficiency. They were also urged to share profits by reducing lending rates, aiding businesses and creating jobs while maintaining the banking sector's stability.

The official dispatch calls for prioritising credit in key sectors and growth drivers such as investment, consumption, exports, digital transformation and green development while closely monitoring high-risk sectors to maintain safe and effective lending practices.

ALCHEMPro News Desk (DS)