At Co-opBank’s Ninh Binh branch.

Credit institutions have affirmed their commitment to work alongside businesses, willing to share profits, while also calling for liquidity support mechanisms and more flexible policies to create room for substantive and sustainable interest rate cuts.

Cutting costs, building consensus to reduce rates

According to SBV Deputy Governor Pham Thanh Ha, stabilising deposit rates and lowering lending rates is a strategic priority at a time when the economy is rebounding strongly but external risks remain. Citing economic data from the first half of 2025, he noted that GDP rose by 7.52% – the highest six-month growth rate in the 2021–2025 period – inflation was controlled at 3.27%, and total system-wide credit grew by nearly 10%. Deposit rates have been broadly stable, while lending rates are on a downward trend, reflecting the SBV’s policy direction and the efforts of banks.

However, Ha stressed that rate cuts cannot be delayed. Credit institutions need to further reduce costs, improve efficiency and be ready to share profits to lower lending rates, thereby making capital more accessible to businesses and citizens. The SBV also requires banks to publicly post deposit and lending rates on their official websites and to actively communicate their policy stance, fostering public consensus on maintaining stable interest rates.

In response to the SBV’s strong directives, many commercial banks have demonstrated a high sense of responsibility. Pham Toan Vuong, General Director of the Viet Nam Bank for Agriculture and Rural Development (Agribank), said that at the start of 2025, credit demand remained high to meet growth targets, keeping liquidity needs elevated. Nevertheless, Agribank did not raise deposit rates and even lowered short-term deposit rates in April 2025. In the first seven months of the year, the bank restructured its capital sources and controlled input costs, enabling a cumulative average lending rate reduction of 0.37 percentage points by July 31 compared with the start of the year. Agribank also rolled out several preferential credit packages with interest rates 2–3 percentage points lower than usual, disbursing over 300 trillion VND in seven months.

“Agribank hopes the SBV will continue measures to control deposit rates to ensure fair competition and enhance the competitiveness of State-owned commercial banks, including Agribank,” Vuong suggested.

Le Quang Vinh, General Director of the Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank), affirmed the bank’s compliance with SBV directives to keep deposit rates stable while offering preferential credit packages, and committed to maintaining reasonable deposit rates. He proposed that the SBV consider lowering the deposit rate cap to give banks better input costs, thereby supporting business activity, and increase the proportion of State Treasury deposits counted as short-term funding to boost lending capacity.

Le Ngoc Lam, General Director of the Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV), said the bank had cut income by about 3 trillion VND in the first seven months of 2025 to facilitate lower lending rates. BIDV’s deposit rates have also been reduced. To keep deposit rates stable and cut lending rates, he proposed that the SBV raise the limit for electronic borrowing from the current 100 million VND to better meet demand and reduce credit costs.

Need for a coordinated policy approach

Pham Chi Quang, Director of the SBV’s Monetary Policy Department, noted that credit institutions have actively supported businesses and individuals in reducing interest rates through various preferential lending programmes. Since the start of 2025, listed deposit rates at commercial banks have remained broadly unchanged from the end of 2024. As of July 20, the average deposit rate for new transactions was 4.18% per year, while the average lending rate for new transactions stood at 6.53% per year, down about 0.4 percentage points from late 2024.

He added that some banks had raised deposit rates locally, causing minor market fluctuations. The SBV promptly inspected and corrected these cases, and will intensify supervision of rate disclosure and compliance to maintain market discipline and avoid undermining system-wide efforts to lower rates.

Nguyen Quoc Hung, Vice Chairman and Secretary-General of the Viet Nam Banks Association, emphasised that while stabilising rates is a shared responsibility, sustainable lending rate cuts require well-calibrated policies and liquidity support for banks, such as flexible use of State Treasury deposits. The association will continue to encourage member banks to align with the SBV and Government’s policy direction to ensure system stability and tangible economic support.

According to many experts, the GDP growth target of 8.3–8.5% for 2025 can only be achieved if credit flows strongly in the right direction at reasonable cost. However, relying solely on internal cost-cutting by banks will not deliver a breakthrough. While commercial banks are already reducing profits and controlling costs without engaging in cutthroat competition, further progress demands coordinated action from regulators through flexible policy management and substantive support mechanisms. These should focus on maintaining market discipline, ensuring banking system safety, and making effective use of public financial resources such as State Treasury deposits – all with the aim of stabilising and lowering market interest rates.