The State Bank of Vietnam (SBV) decided to limit the ceiling for annual lending interest rates for four industries at 15% beginning May 8.
VND lending interest rates for four industries to be capped at 15% per year
The SBV issued a circular on the new caps on lending interest rates for VND at bank accounts and financial institutions on May 4.
As a result, the ceiling lending interest rates in VND must be equal to the maximum interest rate for deposits with terms of one month and above, plus 3% annually, according to the new SBV regulations.
The cap of 15% for lending interest will be applied to four industries, including agriculture and rural development, production and trade in exports, production and trade for small and medium-sized enterprises, and supporting industry development.
Local People’s Credit Funds, alone, will be allowed to apply a ceiling lending interest rates in VND for these industries, at 15.5% per year, the SBV said.
Lending interest rates for loans signed before this regulation takes effect will remain on the terms of the contracts, the bank added.
In late April, the SBV requested that both domestic and foreign banks and financial institutions apply measures to help troubled clients maintain their businesses in the time to come.
Financial institutions were told to give more scrutiny their clients and their business plans before making loans.
In addition, commercial banks were encouraged to develop plans to extend deadlines for debt repayment for clients who are unable to settle their settle on time.
The SBV decided again to lower the ceiling for deposit interest rates by 1% to 12% per year across the board on April 11.