government decision to allow negotiations on more types of loans will create
healthy competition among banks and thus benefit businesses, said an official
from the national financial advisory body.
advise the government to extend the permission to short term loans to benefit
more farmers and exporters," Le Duc Thuy, Chairman of the National Financial
Supervisory Committee, was quoted by local news website VnExpress as
Bank of Vietnam in late February allowed lenders to negotiate with clients on
interest rates for medium to long term loans in specific areas including
production, business, service and investment for development. Previously banks
could decide rates outside the lending rate cap only on consumer loans.
reasonable that businesses worry about being "oppressed" by lenders after such a
move, Thuy said.
question is: were they oppressed when lending rates were not negotiable? I say
they were, even more."
rates are based on the market," Thuy said. "The government can regulate and keep
the balance on the market in check, but it can't fix interest rates."
lending rates surging, local lenders are facing difficulties raising funds as
depositors now demand higher rates than the current deposit rate cap of 10.5
percent a year, he said.
Minister Nguyen Tan Dung has agreed with our proposal that the deposit rate cap
should be eliminated too. He has asked the central bank governor to consider the
proposal," said Thuy.