Many banks breaking deposit interest cap: report

TN News

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Many banks including the larger ones are breaking the rate cap on dong deposits set by the central bank in February, news website VnExpress reported Thursday.

As some banks faced difficulties in raising funds amidst soaring consumer prices, they've tried to attract deposits with higher rates of up to 18 percent a year, the report cited an official of the Vietnam Bank Association as saying.

Although the industry group did not identify any banks, it said the violation was widespread.

The State Bank of Vietnam in Februuary recognized the rate cap of 14 percent on dong deposits that had been established earlier by the bank association. All banks are required to publicly announce their deposit rates and are not allowed to offer perks or cash bonuses that would raise rates above the cap, the central bank said.

Previously violators of the rate cap were often small-sized banks or those in rural regions, but now even "large and prestigious" banks were doing it, the report said.

The official said it's unlikely that the government will remove the rate cap as the goal now is to control inflation and restrore economic stability. However, the cap now works only in theory, he added.

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