State-owned Vietcombank raised interest rates for long-term đồng deposits last week after more than a year of rates remaining unchanged.
Accordingly, the bank inched up the rate for long-term deposits (from 12 months upward) by 0.1 percentage points to 6.6 per cent per year.
Despite the hike, Vietcombank’s rates are still the lowest in the banking system. The bank’s rates are some 0.1-0.2 percentage points lower than those of three other State-owned banks – BIDV, VietinBank and Agribank – and 0.5-1.5 percentage points lower than those of private banks.
Earlier, most banks hiked deposit interest rates, of which the rise at BIDV, VietinBank and Agribank was 0.2 percentage points, while it was up to 0.5-1.4 percentage points at private banks.
According to analysts, banks have been forced to raise rates to meet a central bank regulation on the use of deposits to lending that takes effect next year. Under the State Bank of Việt Nam’s Circular 06, only 40 per cent of short-term deposits can be used for medium- and long-term loans from January 1 next year, down from 45 per cent now.
Besides, banks also need more capital as credit demand usually peaks at the year-end, the analysts said.