Highlights of Vietnam’s financial market in March, 2024

Consensus on proposal to end SJC gold monopoly

On the afternoon of March 28, Deputy Prime Minister Le Minh Khai, Chairman of the National Financial and Monetary Policy Advisory Council, chaired a plenary meeting of the Council.

During the session, the State Bank of Vietnam (SBV) presented a report on macroeconomic developments, banking activities in the first quarter of 2024, proposed solutions to overcome difficulties in production and business activities, promote growth, and ensure major economic balances. It also discussed the gold market situation and future market management measures.

Experts agreed with the proposal to abolish the state monopoly mechanism on the production of gold bars, allowing the issuance of gold bar production licenses to qualified enterprises.

State Bank requests a review of credit card interest calculation methods

The SBV requested a review of credit card interest calculation methods. If any abnormal issues are detected in the use of customers' cards, such as no transactions occurring or prolonged overdue debts, banks must proactively inform customers and coordinate with relevant parties to take timely measures to ensure no infringement on customers' legitimate rights and interests and the issuing organization's rights.

Furthermore, a review is required to ensure compliance with SBV and relevant legal regulations regarding fees, interest rates, interest calculation methods for each type of card, transparency, providing full information, and ensuring customers are informed about their rights and obligations, fees, interest rates, interest calculation methods (especially for credit cards), and any changes during card usage.

This is the noteworthy content in Circular 2235/NHNN-TT issued by the SBV regarding the implementation of measures to ensure security and safety in bank card activities.

Former DongABank CEO Tran Phuong Binh causes damages of 981 billion VND

On March 28, former DongABank CEO Tran Phuong Binh was brought to trial in the fifth case related to allegations of directing loans against regulations, causing nearly 981 billion VND in damages to the bank.

Mr. Binh was once a prominent figure in the banking sector, the wealthiest tycoon in Vietnam's gold market. He is serving a life sentence, the cumulative punishment from four previous verdicts by various levels of courts that have been finalized.

Deposit interest rates begin to rise, will lending rates reverse soon?

While many commercial banks are reducing deposit interest rates, there are a few banks starting to raise deposit interest rates again for both short and long terms. Since the beginning of March, four banks have increased deposit interest rates.

Many people worry that the increase in deposit interest rates will lead to an increase in lending rates. However, according to experts, this trend is not a cause for concern and will not significantly affect lending rates, as the trend of reducing deposit interest rates remains dominant.

Another ‘giant’ in banking publicly announces average lending rates

After BIDV, Agribank is the next bank in the Big4 group to publicly announce average lending rates. Previously, other banks such as ACB, TPBank, LPBank, BacA Bank, and VietBank have also disclosed average lending rates.

In accordance with the government's direction, the SBV has requested credit institutions to disclose average lending rates, the difference between deposit and average lending rates, lending rates for credit programs, credit packages, and other types of lending rates (if any).

The SBV requires credit institutions to provide links to the section announcing various interest rates on the SBV's website before April 1. If the link changes, it must be updated within 2 working days.

Total assets of the banking system reach over 19.5 quadrillion VND

By January 31, 2024, the total assets of the entire credit institution system reached 19,545.672 quadrillion VND, and the total charter capital reached 1,003.601 trillion VND. The total assets of the banking system decreased by over 500 trillion VND compared to the beginning of the year.

The decreasing trend of total assets is consistent with credit (the largest component of banking system assets), as the total system debt decreased by 0.6% in January 2024.

Group of 14 banks with systemic importance in 2024

The SBV has issued Decision 538/QĐ-NHNN approving the Group of credit institutions, foreign bank branches with systemic importance in 2024, consisting of 14 banks.

The SBV requires bank inspection and supervision agencies, SBV provincial branches, and centrally-run municipal branches to closely monitor and timely warn of risks in the operations of the 14 credit institutions mentioned above to prevent significant risks, systemic risks.

Bank USD price exceeds 25,000 VND

On March 28, the USD price at commercial banks reached a new peak. Some banks set selling prices exceeding 25,000 VND/USD.

Although cooling down, the USD buying price on the free market remains higher at commercial banks by about 800 VND. Meanwhile, the USD selling price in the "black market" is higher at banks by 500 VND.

Source: vietnamfinance

Compiled by VBI