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VN frees lending rates for short-term loans

VGP – Credit organizations are allowed to bargain with their clients about interest rates of short-term VND loans, according to the State Bank of Việt Nam’s (SBV) Circular No. 12/2010/TT-NHNN issued and took effect today.

04/14/2010 04:00

  The State Bank of Việt Nam: It is proper time to adopt the negotiable lending rates between credit organizations and clients as the national economy is showing  positive signs of recovery and growth

Credit organizations offering VND loans are obliged to post up their lending rate notice.

The central bank ordered these organizations to facilitate capital flows to business activities, agricultural production and rural development, exporters, and small and medium-sized enterprises.

Credit organizations are requested to make reports to the SBV about their lending rates in VND and their related regulations.

Earlier this year, the SBV also freed lending rates that the commercial banks charge for medium- and long-term loans to be "negotiable."

Financial expert Doãn Hữu Tuệ from the SBV said that the new circular is a step toward in lowering and liberalizing lending rates.

Experts forecast that credit organizations, to uphold their clients, would not raise their negotiable lending rates.

It is expected that a new prime lending rate will be set up at around 14-15%/year.

Currently, many commercial banks offer the lending rates ranging from 12-14%/year.

SBV explained that it is proper time to free lending rates as the national economy is showing positive signs of recovery and growth.

By Hải Minh