A bank teller counts Vietnamese banknotes. Local banks have reached a consensus to slash lending rates in the rest of this year to support businesses and residents affected by the Covid-19 pandemic – PHOTO: THANH HOA

HCMC - Local banks have reached a consensus to slash lending rates during the rest of 2021 to support businesses and residents affected by the Covid-19 pandemic, it was announced at a meeting between the Vietnam Bank Association with leaders of 16 banks on July 12.

Nguyen Viet Manh, a board member of Agribank, said that the bank would lower rates by 0.5-2.5 percentage points per year to support firms affected by the pandemic.

Techcombank will mainly cut interest rates for corporate clients which produce essential goods or have a large number of workers, said Pham Quang Thanh, deputy general director of the bank.

It is unnecessary to lower rates for real estate firms and exporters, for now, he added.

In the initial period, Military Commercial Joint Stock Bank (MB) will directly support firms which have earned no revenue or have seen revenue plunge, such as lodging facilities and service providers, by cutting interest rates by one percentage point or more per year. Next, the bank will lower rates for individual customers and production firms, said Pham Thi Trung Ha, deputy general director of MB.

Speaking at the meeting, Phan Dinh Tue, deputy general director of Sacombank, said that though the bank’s earnings would fall, it would cut interest rates for firms having difficulty with cash flows.

At the meeting, local banks also proposed the central bank raise the credit growth limits during the rest of the year to make it easier for banks to increase lending to customers, the local media reported.

Nguyen Thanh Tung, deputy general director of Vietcombank, said that the central bank capped the lender's credit growth at 10%, while its lending had already expanded 9%, leaving little room for the bank to make more loans. As such, to continue to support customers to ride out the hardship caused by the pandemic, Vietcombank expects the central bank to raise the credit growth limit.

Nguyen Quoc Hung, general secretary of the association, also proposed the State Bank of Vietnam consider setting a credit growth ceiling for each bank each year. Banks that are applying the Basel II or Basel III standards well should be prioritized for credit room expansion.