The State Bank of Vietnam has ordered banks to respect the 14 percent ceiling on dong deposit rates, warning to suspend activities at violating banks.
All commercial banks have to publicly announce their deposit rates, according to a central bank statement last week. The rates, including perks and bonuses, are not allowed to exceed 14 percent, the central bank said.
Banks breaking the cap will be fined or have certain activities suspended, the statement said.
The central bank also asked lenders to cut operational costs so that they can offer lower lending rates to exporters and clients in the agricultural sector.
The State Bank of Vietnam in February officially recognized the rate cap of 14 percent on dong deposits, a ceiling that had been established earlier by the country's bank association.
Market rates, however, have been higher than the cap.
A report published on the Vietnam Television news website on Sunday said the cap is widely broken by many banks, who avoid being caught by offering cash bonuses to customers under the table.
Most banks actually pay 18 percent a year for dong deposits, the report said.
Vietnam's tightened monetary policy is expected to be sustained through 2012. The government said last week that the goal for next year is to control inflation and ensure stability for the economy.
The government has set the economic growth target for 2012 at 6.5 percent, slightly higher than this year's 6 percent.