Techcombank ordered to fire branch head

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A Vietnamese central bank official has called for the termination of a Techcombank branch director for offering illicit interest rates.

Last week, during the working sessions with the central bank, Hanoi- and Ho Chi Minh City-based commercial lenders pledged to limit the annual dong deposit rate to a maximum of 14 percent, per year, starting December 11.

According to the agreement, banks wishing to launch special promotions cannot exceed a ceiling of 15 percent.

The Vietnam Bank Association says this commitment amounts to a binding agreement, not a negotiation for voluntary action.

Ho Huu Hanh, Director of the central Bank's HCMC branch, said that Le Hoa Thuan, Director of Techombank's Phu My Hung branch, raised annual interest rates on dong deposits to 16.8 percent, even after the institution pledged to slash its rates to 14 percent starting December 11.

For this reason, Hanh says, Thuan has to go.

The central bank has already censured the firm's chairman and general director for launching a promotion entitled "Three golden days" under which dong depositors were offered 17 percent annual interest.

The central bank said the program, which lasted from December 8 to 10, triggered an interest rate race that peaked at 18 percent.

Last month, commercial banks agreed to keep the savings rate below 12 percent but "silently" increased their rates, several days later.

Representatives from the Vietnam Bank Association say that any bank found violating the new commitment will suffer penalties.

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