Prime Minister Nguyen Xuan Phuc and the State Bank of Vietnam (SBV) had called for the rate cuts, before the PM took part in a dialogue with enterprises in HCM City on April 29.
Tran Bac Ha, Chairman of the Bank for Investment and Development of Vietnam (BIDV), said his bank cut rates for short-term loans by 0.5 percentage points, and adjusted the rates for medium to long-term loans to no more than 10 percent per year on April 29.
The adjustments will apply for loans related to production and business activities.
Hà said the bank would speed up mobilising medium and long-term capital to ensure credit security, and closely control property and securities loans and other areas with high risks in the coming months.
It would try to diminish VND500 billion to VND600 billion (US$22.2 million to US$26.7 million) in operational costs in 2016, he said.
The Bank for Foreign Trade of Vietnam (Vietcombank) also announced that it would offer businesses medium to long-term loans with annual rates of no more than 10% within a year.
The bank would reserve some VND300 billion to help enterprises assure proper business plans and enhance the quality of credit.
On April 28, the Vietnam Bank for Industry and Trade (VietinBank) General Director Le Duc Tho also affirmed a similar cap of 10 percent for rates of medium to long-term money that it lends in the coming months.
VietinBank may even cut rates by one percentage point from the general levels in the market, for projects it assesses as “good”, he said.
“Actually, [current] lending rates for enterprises and individuals are relatively reasonable. Banks will need comprehensive measures to control credit quality in order to lower rates further,” Tho said.
He specified that banks would have to select customers more carefully to avoid bad debts, save more on costs, and even reduce their profit targets so as to help enterprises.
SBV Governor Le Minh Hung said commercial banks were acting together in sharing the difficulties of businesses, and industry insiders expected that the major banks would act as vanguards in cutting rates and would encourage smaller lenders to follow suit.
Hung said the SBV was maintaining caution in monetary operations, aiming towards a gross domestic product growth rate of 6.7 percent, with an expected inflation rate of 5 percent this year. The central bank would closely monitor credit developments to ensure the stability of interest rates.
Ha from BIDV said banks’ lending rates currently range between 7 percent and 11 percent, and this was the best range seen in the last few years.