State Bank of Vietnam on September 28 issued a Circular to cap the maximum VND deposit interest rate in all credit institutions and foreign banks at 14 percent.
This cap will apply to all non-resident Vietnamese, organizations, individuals and foreign residents in Vietnam.
Accordingly, credit institutions will set a maximum VND deposit interest rate of 14 percent per year on all deposits made, including on all kinds of promotional campaigns. The only exception will be the local People's Credit Fund which is permitted to set a maximum VND deposit rate of 14.5 per cent per year.
The highest interest rate for non-term deposits will be set at a maximum six percent per year.
Moreover, SBV will require credit institutions to quote VND rates at their headquarters, transaction offices and savings funds in line with SBV regulations. Credit institutions are strictly prohibited to launch promotional programs using cash, and any such violation of law and this Circular will be unacceptable.
The SBV Financial Supervision Agency and the SBV provincial and municipal branches will be responsible for monitoring the implementation of the VND interest rate at 14 per cent and will take all measures under their jurisdiction to deal with violators of this Circular.
The circular will take effect from 1 October 2011.