Nhan Dan - Many domestic commercial banks have reduced their lending interest rates and launched various credit programme to boost lending activities after the State Bank of Vietnam issued three decisions on regulating monetary policies, to be applied in October, including maintaining the prime interest rate at 14% a year, increasing the interest rate for compulsory reserve and allowing credit institutions to use compulsory SBV bills as mortgage for borrowing and discounting at the SBV and as instruments in the open market operations run by the SBV.

The Bank for Investment and Development of Vietnam (BIDV) has immediately announced its reduction in lending interest rates for enterprises.

Accordingly, from October 1, BIDV will apply new lending interest rate of 18.2% per year for all available customers borrowing in Vietnamese dong, down 1.8% compared to the current 20% a year and 6% a year for loans in US dollar.

The Commercial Bank for Foreign Trade of Vietnam (Vietcombank) has also announced it will accelerate lending programme for small and medium-sized enterprises by granting VND 3 trillion more in its 2008 credit development plan for these customers.

In addition, Vietcombank has decided to slash its lending interest rates in Vietnamese dong. Specifically, the normal rate is 19.5% a year while the preferential rate is 18.525% a year.

The Bank for Agriculture and Rural Development (Agribank) also decrease its lending interest rates in all 2,200 branches and transactions offices throughout the country from 20% a year to 19.5% a year. For traditional customers, the preferential rate is 19% a year.

The Industrial and Commercial Bank of Vietnam (Vietinbank) also bring its normal lending interest rate to 19.5% a year, down 0.7% a year compared to the old level.

Vietinbank has also had separate reduction in lending interest rates for different types of borrowers. This has been the third time within the past three months Vietinbank has lowered their lending interest rates.

Joint stock commercial banks have also joined the trend. VPBank said it will grant VND 2 trillion from now to the end of the year to boost credits for its customers, focusing on small and medium-sized enterprises and individuals.

Techcombank has reduced its lending interest rate by 0.5% to 20% a year. The bank also said it will grant VND 3-4 trillion as credits to support enterprises working in key economic sectors.

According to experts, the latest three decisions by the SBV have helped eased difficulties for banks, leading to their decisions to reduce lending interest rates, in an effort to sharing difficulties with domestic enterprises. Banks are planning to continue their lending interest rates from now to the year-end, helping enterprises re-access to bank capital.