At Viet A Bank, the highest interest rate is now 11.5 percent, not applied to 3 month term or longer deposits. Meanwhile, interest rates for shorter term deposits of one or two months is 11.2 and 11.3 percent per annum. Rates of 9-9.8 percent are being offered for week-term deposits.

At HCM City Housing Development Bank (HD Bank), the highest interest rate has lowered to 11.4 percent for 3 month term deposits. Meanwhile, rates of 11 percent and 11.35 percent are applied to one- two month term deposits.

According to SBV, by the end of May 2010, deposits had increased by 17 percent, while outstanding loans had grown by only 8 percent. A credit growth rate of eight percent is considered too low if noting that the targeted credit growth rate for the whole year is 25 percent.

SBV, implementing instructions by the Government to slash deposit interest rates to 10 percent and lending interest rates to 12 percent, has threatened to inspect banks that apply overly high deposit interest rates.

Meanwhile, according to the HCM City Branch of SBV, capital mobilization by the banks in HCM City has slowed. Bankers also maintained that the volume of capital mobilized by the banks has plunged. Therefore, it is very difficult for banks to lower deposit interest rates immediately and ease lending interest rates.

“Depositors do not want to see the deposit interest rates down, while borrowers still expect to see interest rates drop further,” a banker commented

Regarding real estate credit, outstanding loans reached 192 trillion, a modest increase of 4.54 percent in comparison with the beginning of 2010. Real estate credit in the first months of 2010 proved to be low if noting that the figure was 20 percent in 2009.

Bankers claim that demand for borrowing money to purchase apartments has decreased sharply, because of high lending interest rates, while the real estate market remains quiet.

People also do not want to make transactions at this moment, because they must pay personal income tax on real estate. Banks nowadays do not want to provide loans to fund these purchases either, because they lack medium and long term capital. All these reasons explain why real estate credit has expanded slowly.

SBV added that outstanding loans given to fund securities investments increased by 13.6 percent compared to the beginning of 2010, reaching 14 trillion dong.

In late 2009, the State Bank announced that real estate outstanding loans were 166,500 billion dong and securities loans 11,900 billion dong.

Source: Tuoi tre, Dau tu