Since early January, capital mobilization of commercial banks has faced many difficulties, owing to shortage of attraction of interest rates and supply and demand of currency market. Therefore, commercial banks are asking to the State bank to remove the ceiling interest rate, facilitating capital attraction and meeting the economy’s demand.

 

A reasonable interest rate on capital mobilization and lending will help ensure social welfare.

In 2008, CPI of March, 2008 rose 2.28%, lifting 2008’s CPI index up to 19.96%. Meanwhile, CPI of March, 2010 in HCMC and Ha Noi city surged 0.75% and 0.78% respectively, increasing 0.6%-0.7% of CPI of the whole country in this month. Finance Minister Vu Van Ninh said the increase of March CPI was likely from electricity and coal price hike. However, the price hike is still under control of the government and with close managerial measures of the government, the whole year’s CPI can be controlled. This means that the current level of deposit interest rate still lures depositors.

However, the commercial banks still face many problems of capital mobilization. According to experts, some commercial banks are offering the highest possible interest rate of 10.5 percent to all kinds of deposits. The actual interest rates depositors can enjoy are higher than 12 percent, because banks offer gifts and bonus money. With the current interest rate policy, under which the same interest rate is applied to deposits of differing terms, it may happen that money will run from one bank to another, thus making the banks’ liquidity risks even higher.

The deposit interest rate increase will cause a surge of lending interest rate, impacting on businesses’ costs and economic growth and social welfare.

The economy has just overcome the most difficult period, many businesses must face output cutting, price cutting and restructure to grasp the pace of economic recovery. Understanding the obstacles, the government has kept maintaining interest rate subsidy policy for businesses.

The removal of ceiling interest rate shoud be mulled over for the sake of the economy’s interests. This means that currency policy must base on rights and interests of depositors, borrowers and lenders. According to economists, instead of interest rate increase, the State bank can support commercial banks to cut costs, facilitating banks’ interest reduction for the sake of the economy.

Reported by T.Huynh – Translated by A.C