Many banks have cut interest rates by 0.5-1 percentage points on loans for businesses following a call by Prime Minister Nguyen Xuan Phuc.
Vietcombank, one of the country's largest lenders, Friday reduced the maximum interest rate on medium- and long-term loans from 11 percent to 10 percent a year.
The bank plans to lend businesses around VND300 billion (US$13.32 million) at low rates.
The same day other big lenders such as BIDV and Vietinbank and some smaller banks like Saigon-Hanoi Commercial Bank and Techcombank promised to reduce their cap on short-term loans by 0.5 percentage points.
Before the cuts businesses borrowed at 6.8-9 percent in case of short-term loans and 9.3-11 percent for medium- and long-term loans, according to the central bank.
Since the beginning of this year, after many banks hiked deposit interest rates, many economists have been expecting lending rates to go up.
However, at a meeting with businesses on Friday the PM called on the central bank and lenders to reduce interest rates to support businesses who said high borrowing costs were affecting their competitiveness.
Interest rates in Vietnam are much higher than in other Southeast Asian countries such as the Philippines and Malaysia where they are only 2.1-2.2 percent.