The central bank’s new policy aims to reduce risk, tighten control and to channel capital into priority sectors and small-to-medium-sized enterprises, according to the SBV.

Under SBV's Decision 2416, the annual interest rate was slashed by half a percentage point to 6.0 per cent for borrowers in priority sectors such as agriculture, export and supporting industries as well as hi-tech firms and small-to-medium-sized enterprises.

Under the proposal, commercial banks could freeze accounts if they have sufficient evidence the accounts were used for or involved in fraudulent and illegal activates.

The State Bank of Vietnam (SBV) has recommended banknotes used in cash-based transactions be thoroughly checked for counterfeits. 

Many commercial banks are racing to mobilise capital, luring customers with deposit interest rates of up to more than 9 per cent or 10 per cent per year.

BUSINESS BEAT