Nhan Dan - A number of commercial banks have announced they will cut maximum interest rates on existing loans to 15% per year in a bid to support local enterprises.
The move came after the State Bank of Vietnam (SBV) ordered commercial lenders to reduce their lending rates at a banking conference on July 7.
VietinBank Chairman Pham Huy Hung said that the bank will slash interest rates on existing loans to 15% starting July 15.
He added that in some special cases businesses may be completely exempt from paying interest.
On July 11, the Saigon-Hanoi Bank (SHB) also announced its rate cuts in response to the central bank’s instruction.
Since April, SHB has cut interest rates on 5,500 loans worth a total of VND8.57 trillion (US$411.36 million) and extended the deadlines for VND3 trillion (US$144 million) in debt payments for 600 customers.
Loans with higher than 15% annual interest rates currently account for 35% of SHB’s total lending.
In another development, TienPhong Bank said it will offer VND3 trillion (US$144 million) in preferential loans for small- and medium-sized enterprises, while HDBank will lower rates on consumer and business loans to 12% and 11% respectively.
SBV Governor Nguyen Van Binh warned earlier that if interest rates remain high, it will push enterprises deeper into crisis and banks will also suffer because they will not be able to recover their loans.