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Banks commit to cutting lending rates for pandemic-hit firms

A bank teller holds stacks of Vietnamese banknotes. Banks have pledged to reduce lending rates for pandemic-hit enterprises with a total value of VND20.3 trillion - PHOTO: THANH HOA

HCMC – Sixteen banks have pledged to reduce lending rates for enterprises affected by the Covid-19 pandemic this year with a total support value of VND20.3 trillion.

At a press briefing after the regular Cabinet meeting on August 11, Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV), said the pandemic had been raging in many localities and the Government had repeatedly sought action plans to eliminate the difficulties facing enterprises to reach the dual goals of fighting the pandemic and ensuring stable socioeconomic development.

Following the Government’s directives, the banking sector launched multiple solutions, such as rescheduling loan repayments and reducing lending rates, Lao Dong newspaper reported.

Most recently, 16 banks have committed to supporting the economy with the capital sourced from their profits. Four big State-owned banks--Vietcombank, VietinBank, Agribank and BIDV---have also committed a VND1-trillion package to reduce lending rates for enterprises and residents in localities facing difficulties caused by the pandemic and practicing social distancing under the prime minister’s Directive 16.

In addition, these banks have exempted all customers in HCMC and Binh Duong from banking fees.

SBV will ensure banks are living up to their commitments and will require them to regularly report the results of their support solutions, Tu added.

Since the Covid-19 pandemic broke out in Vietnam, the central bank has cut the operating interest rate by 1.5 to 2 percentage points and called on commercial banks to reduce their lending rates.

Tu said banks had cut lending rates with a total value of VND18.83 trillion since last year, benefitting multiple enterprises.

The central bank has also adopted social policies to contribute some VND7.5 trillion to the VND26-trillion support package for the disadvantaged during the pandemic.