Why haven't big banks reduced lending interest yet?

By Viet Thanh   May 3, 2023 | 04:00 pm PT
Why haven't big banks reduced lending interest yet?
Stacks of Vietnamese dong notes are checked at a bank in Hanoi. Photo by VnExpress/Giang Huy
It is the enterprises and the people who support the strong development of large banks, so at this time, it is very necessary for the joint effort and unity of the banks to work for us.

Capital is a problem in the production sectors as inflation and an impending economic recession have led to decreased demand and withering orders. Reducing lending interest rates is one of the leading solutions that the government has put forward to overcome difficulties for businesses and revive the economy. Many readers support this policy.

"In difficult times, when many companies have to declare bankruptcy and downsize, the banks still report huge profits and high growth. I believe everything needs to be sustainable and systematic. Enterprises and people are the ones who support the strong development of large banks when they use their services. Therefore, at this time, it is very necessary to have the joint effort and unity of the banks to support customers who are facing exceedingly tough times to overcome difficulties."

"Last year, banks all saw their after-tax profits increase by dozens of percent, while businesses struggled with high bank interest rates, along with cutting personnel to reduce costs, causing many workers to lose their jobs. I hope the banks will share the difficulties with businesses and people. It is necessary to determine how much lending interest rates will be reduced, so that businesses can focus their resources on investing in production, gradually reducing the unemployment rate for workers."

"Banks need to learn a lesson from the 2009-2011 period when they tried to increase interest rates, which caused the country to suffer. If only depositors benefit from higher interest rates, borrowing decreases and bad debts increase, the consequences of which are very unpredictable. For banks, reducing interest rates should be a top priority, and it could be a triple win: retaining borrowing customers, not increasing bad debts, and still maintaining profits in this tough economic period. As for depositors, I believe that even if interest rates are further reduced, they will still deposit because banks are the safest place to keep money, with no risk, and the funds can be withdrawn immediately when needed. Retirees, over 65 years old, mostly choose to deposit in banks for safety to support their old age, instead of risking investing in real estate, securities, or digital currency like young people. Therefore, banks do not need to worry about losing deposit customers when reducing interest rates."
Manh Quang

"Banks must fix interest rates for loans, fix fees, and be prohibited from selling accompanying insurance at a specific figure (for example, not exceeding 7% per year). This would be a meaningful action to help businesses overcome borrowing difficulties. This is the time to rescue the economy, so solutions must be applied immediately in the short term, such as six months, one year... so that businesses and people in need of loans know how to calculate future costs. Currently, to borrow from banks, borrowers have to accept interest rates changeable according to the market every three months, which is difficult to calculate and keep up with."
Lam Van Trin

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