Several banks have continued to raise the interest rates for long-term deposits, chasing it up to 12% per year, after the State Bank of Vietnam has agreed to remove the rate cap for over-12-month deposits.

The 36-month deposit rate at Asia Commercial Bank (ACB) has increased to 12% from the posted rate of 9% last Saturday. Besides, with terms of over 12 months, the rate ranges between 10.5% and 11.5% per year.

Saigon Thuong Tin Bank (Sacombank) on Wednesday morning also raised the rate for deposits of 24 and 36 months to 12%, but then the bank lowered this rate by one point to 11%, still much higher than the rate for short-term deposits at 9%.

At HCMC Housing Development Bank (HDBank), the rate for 15- and 18-month deposits is 11.5%, while it is 11% for deposits of other long-term deposits. Ocean Commercial Bank (OceanBank) has also adjusted the rate, with 10% for over-12-month deposits and 10.5% for over-36-month deposits.

Nguyen Thanh Toai, deputy general director of ACB, said that the rate increase for long-term deposits at ACB aimed to stimulate the medium- and long-term capital inflows to offer medium- and long-term loans as clients normally made short-term deposits.

Toai also expected the number of clients making long-term deposits would rise as the lending rate was forecast to fall in the coming time.

According to Nguyen Thi Mai Huong, deputy general director of OceanBank, clients of the bank have tended to shift from short-term to long-term deposits when the Vietnam dong mobilization rate cap has dropped with four adjustments in the past three months, from 14% to 9%. Clients have now preferred and chosen longer terms, mainly for deposits of VND10-500 million.

Clients still worry over a deeper cut in interest rates for short terms, and thus the mobilization rates for long terms may still increase, Huong said.

When allowing for a floating rate for over-12-month terms, the State Bank said this was a chance for banks to restructure their capital sources with specific terms and a step towards the mobilization cap removal in the future.

Besides, the State Bank stated it did not worry about a race among banks to chase up interest rates, especially for long-term deposits of over 12 months, because the liquidity is currently abundant, inflation is forecast to be low, weak banks are being consolidated and the credit growth potential of banks remains low.

The Saigon Times Daily