Central Bank deals with banks violating interest cap

The State Bank of Vietnam is stepping up measures to penalize banks that are exceeding the deposit interest cap rate of 14 percent per year by offering bonuses, promotions and incentives to customers.

Customers conduct transactions at a bank in Ho Chi Minh City.

On September 15, the Tay Ninh Branch of the State Bank decided to dismiss Nguyen Thai Hau, director of a Dong A Bank branch in the southern province of Tay Ninh for violating interest rate regulations. It also asked the bank not nominate him to a managerial position for the next three years.

Lam Thi Minh Anh, head of the accounting department of the bank was also discharged. In addition, Dong A Bank has been banned from opening any further branches, transaction offices and ATM machines across the country for a period of one year from September 14.

Dong A Bank has also pledged in writing to comply strictly with regulations on interest rates in future.

On the same day, the State Bank said that Nguyen Thi Thuy deposited VND1 billion into the Ba Dinh Branch of Agribank in Thanh Hoa Province at 14 percent interest. It was also found that Bui Thi Sau, an employee of the bank, bought a present worth VND1 million for Thuy from his personal money.

Agribank issued warnings to Sau and Nguyen Thi Huyen, demoted them and slashed their salaries. The bank also warned the director of Agribank at the Thanh Hoa Province Branch against such violations in the future.

On September 9, Ton Duc Thang Transaction Office of the Agribank Saigon Branch was found to exceed the interest cap rate by offering bonuses. Agribank decided to dismiss Nguyen Thi Ngoc Lan, deputy director of the unit and warned Agribank Saigon Branch director Vo Viet Hung against such incidents in future.

The State Bank directive on capping the interest rate at 14 percent per year came into effect on September 7.

By M.Thao – Translated by T.Huong

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