After reducing several key interest rates by 0.25 percentage points on September 16, the SBV’s agencies this week continued to announce the reduction of some service fees, which will help commercial banks reduce operation costs and thus cut interest rates.
Under Decision No 203/QĐ-TTTD, the SBV’s National Credit Information Centre (CIC) decided to reduce the prices of its credit information products and services given to credit institutions and foreign banks’ branches in Vietnam by 15 percent, starting from October 1st this year.
According to the CIC, the reduction aims to help commercial banks cut operating costs, enabling them to lower interest rates.
Banks are expected to cut lending interest rates with support from the central bank (Source: VNA)
The cut will also help banks promote the use of CIC’s credit information to enhance their credit business segment and credit risk governance, which will contribute to reducing risks for the banking system.
According to Nguyen Hoang Minh, deputy director of the SBV’s HCM City branch, the CIC’s information is important for banks to control risks in lending, because a firm can open accounts at many different banks at the same time.
Currently, the CIC’s database stores more than 40.6 million dossiers of borrowers, including those of about one million enterprises. The database is built with the participation of 122 credit organisations and foreign banks’ branches, nearly 1,200 people’s credit funds and four official micro-financial organisations.
In the same move, another agency of the SBV – the National Payment Corporation of Vietnam (NAPAS) – also announced a reduction for its local switching system service fees. The system is interconnected by more than 170,000 ATMs nationwide, starting from October 1 this year.
Specifically, it has reduced 24/7 interbank money transfer service fee for banks by 13 percent. ATM withdrawal service fees have been also cut by 70 percent for banks that issue the ATMs and 100 percent for banks that conduct the payment.
NAPAS has also provided free internal transfer service and non-financial transactions such as information inquiry and statement printing for banks.
In addition, the agency has also continually implemented a promotion programme to reduce 50 percent of its service fees for transactions at ATMs and 24/7 interbank transfer transactions from October 3rd, 2019 to December 31st, 2019 for banks.
On September 16th, the SBV decided to make the first interest rate cut since October 2017, which helped credit institutions access more affordable capital from the SBV, enabling them to improve liquidity and keep market interest rates stable.
Accordingly, the annual refinancing rate and rediscount rate has been lowered from 6.25 percent to 6 percent, and from 4.25 percent to 4 percent, respectively.
The annual overnight electronic interbank rate and rate of loans to offset capital shortage in clearance between the central bank and domestic banks have been also cut to 7 percent./.