Depending on the deposit term, several banks have increased interest rates by 0.1 - 0.2 percentage points.
The interest rate offered by VPBank to individual customers early November was up 0.1 percentage point over October's deposit rates.
Specifically, interest rates for individual customers with term deposits of 1-36 months ranged from 5.1 percent to 7.3 percent per annum.
At OCB, from November 10, interest rates have also been raised by 0.1-0.2 percentage points per annum for some fixed term deposits. The bank's highest deposit rate is 7.7 percent for a 36-month term.
Interbank rates are also seeing an upward trend, with the average interest rate for all durations has increased by 0.126-0.24 percentage points.
Senior bank officials say that the increase in deposit interest rates in November and December is merely a seasonal move by banks to attract idle funds in anticipation of increased borrowing by businesses in the new year.
Some banks have increased interest rates to mobilize capital and restructure reserves to comply with a regulation on credit safety limits. Under the regulation, banks have to ensure their maximum ratio of short-term funds used for medium- and long-term loans is reduced to 40 percent in 2019 from 45 percent in 2018.
Nguyen Hoang Minh, deputy director of the Ho Chi Minh City branch of the State Bank of Vietnam (SBV), told local media that the liquidity of commercial banks in the locality was stable and not under pressure.
However, the increase in deposit rates leads to an increase in lending rates, which is a worry for businesses.
The CEO of a listed company working in the construction and installation industry said his company’s interest expense alone amounts to 4-5 percent of revenues. "However, because of our capital needs, we still have to maintain or even take out supplementary loans. Compared to the beginning of 2018, the interest that companies are already paying now is already 2 percent higher."
While many banks offer lending rates of 6.5 to 7 percent per year, few businesses actually enjoy this preferential rate. The actual rates range from 8-11 percent per year, or even higher, industry insiders say.
According to the Viet Dragon Securities Company (VDSC), the expansion of emerging economies like India, Indonesia, Malaysia, and the Philippines show that these countries have continuously raised interest rates in 2018 to curb inflation.
The currencies of most of these countries have depreciated significantly in 2018, so the trend of raising interest rates in Vietnam is unavoidable. Therefore, businesses have to consider restructuring their loans to meet the actual situation, the company said.
Vietnam’s credit growth in the first nine months of this year was 9.52 percent.
The country’s banking sector posted an estimated 18.17 percent credit growth in 2017, according to the SBV. It has targeted a credit growth of 17 percent this year.