Banks make further rate cuts and debt structuring for customers affected by Covid-19
After the move to reduce a series of operating interest rates as well as ceiling interest rate on short-term deposits, a number of banks have further lowered lending rates; at the same time, rescheduled loan repayment period for customers who are experiencing financial difficulties because of Covid-19.
From March 17, 2020, Vietnam Bank for Agriculture and Rural Development (Agribank) has continued to further reduce lending interest rates in Vietnamese Dong for priority industries and sectors (as prescribed in the Circular No. 39/2016/TT-NHNN) by 0.5% per annum. Accordingly, the minimum interest rate for short-term loans is only 5.5% per annum; the minimum interest rate for medium and long terms at 7.5% per annum.
In addition to reducing interest rates for priority areas, Agribank has been implementing many solutions to support customers and industries affected by Covid-19 outbreak such as: loans rescheduling; considering exemption and reduction of loan interests for customers; providing new loans with preferential interest rates to support borrowers to maintain and stabilize production and business; launching credit package for FDI customers, etc.
For customers affected by Covid-19, currently Agribank has also applied the interest rate reduction of up to 1% per annum (for VND), 0.5% per annum (for foreign currencies).
Another big bank, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has just issued two documents for implementation of Circular No. 01/2020/TT-NHNN of the whole system to support customers affected by Covid-19 outbreak.
Accordingly, along with other supportive measures, Vietcombank has officially implemented restructuring loan repayment period and keeping the debt group for customers affected by Covid 19 under the provisions of Circular 01.
Vietcombank said that on March 20, the bank conducted video conferencing meeting to fully grasp the instructions of the Prime Minister, the Governor of the State Bank of Vietnam and has provided specific trainings on the guiding documents to all 111 Vietcombank branches nationwide.
This is the second wave of interest rates reduction by banks since the Covid-19 outbreak broke out in China and heavily affected the production and business activities of Vietnamese enterprises.
Earlier in early February 2020, banks also reduced interest rates, offering preferential credit packages for customers affected by the outbreak.
According to the State Bank, to date, there have been about VND 926,000 billion of outstanding loans of those customers who are unable to make loan repayments on time, accounting for more than 11% of the total outstanding loans of the whole system. Therefore, along with lowering interest rates, banks have also restructured debts for customers.
In order to support banks, the State Bank of Vietnam has issued a series of decisions to lower the operating interest rates, lower the ceiling interest rate for short-term loans. The reduction ranges from 0.25% to 1%.
- State Bank of Vietnam cut down regulations on business activities
- The State Bank will consider reducing policy interest rates further
- Governor: The banking system is much better so it can support the economy
- Credit resumed positive growth again
- Remittances decline due to Covid-19
- Banks in Ho Chi Minh City restructured over VND 63,000 billion worth of debt affected by Covid-19
- Inward remittances affected by COVID-19
- BVSC: Interest rate levels may continue to decline
- The State Bank of Vietnam directs the establishment of a hotline to assist customers affected by COVID-19
- Creating a favorable environment for digital technology development in credit institutions