Đào Minh Tú, deputy governor of the State Bank of Vietnam. — VNA Photo

HÀ NỘI — Commercial banks have slashed more than VNĐ8.8 trillion (US$386 million) in interest rates from July 15 to August 31 in support of businesses that have been severely affected by the novel coronavirus, said the State Bank of Vietnam on Wednesday.

Since the beginning of 2020, the SBV has cut interest rates three times in an effort to help businesses gain access to more affordable financing and get back on their feet. As a result, the average interest rate among the country's banks has declined by 1.55 per cent compared to pre-pandemic levels. 

According to the SBV, the banks have slashed VNĐ26 trillion in interest rates from January 2020 until the end of August 2021.

This is in accordance with Government Decree 63/NQ-CP, which called on 16 large commercial banks: Vietinbank, Vietcombank, Agribank, BIDV, MB, Bưu Điện Liên Việt, TPBank, VIB, ACB, SeABank, SHB, HDBank, MSB, VPBank, Techcombank and Sacombank to show support for the business community. 

In response, the banks have pledged to slash over VNĐ20 trillion in interest rates for businesses affected by COVID-19 by the end of the year. The big four - the country's four largest State-owned commercial banks Vietinbank, Vietcombank, Agribank, BIDV - will continue to roll out a support package worth VNĐ4 trillion in interest and banking fee cuts for cities and provinces with social distancing measures in place. 

The SBV has been keeping an eye on commercials banks and other financial institutions to make sure they'll make good on their promises to support businesses, said SBV's deputy governor Đào Minh Tú. 

Total credit to the economy was reported at VNĐ9.87 quadrillion, a 7.42 per cent increase from the end of 2020. Credit growth has been recorded across the majority of domestic industries with agriculture, export, supporting and hi-tech industries the most robust. 

Meanwhile, the SBV has continued to implement additional measures to support businesses including interest cuts, postponement of payments, maintaining credit rating and debt restructuring.

The SBV has approved a cash injection for the Vietnam Bank for Social Policies (VBSC). The cash injection has allowed nearly 750 firms to keep over 112,000 workers on the payroll, said the VBSC. By the end of August, the bank has rolled out VND382 billion in loans across the country. 

Notably, the SBV said it has completed a process of refinancing for SeABank, MSB and SHB. The banks have also been given the green light to grant Vietnam Airlines - the country's flag carrier - loans. 

In the coming months, the SBV's top objectives are to prioritise the recovery of key sectors of the economy, tighten control of credit in high-risk areas and support the business community. — VNS