Hanoi (VNS/VNA) - Measures must be taken to bringdown bank interest rates, said the State Bank of Vietnam (SBV) at a meetingwith CEOs from 26 commercial banks in the country on May 25. 

In an earlier development, the SBV issued directives to reduce thepolicy interest rate by 0.5%, from a previous 5.5% to 5% a year, as well as theovernight interest rate in interbank electronic payment and compensatorylending interbank from 6% to 5.5% a year. In addition, the refinancing interestrate was also adjusted by half a percentage point, from 5.5% to 5.0% ayear. 

In another directive, the SBV has instructed commercial banks toallow restructuring repayment and maintain debt groups to support borrowers andbusinesses.  

Failure to comply with the directives in a timely manner willresult in severe penalties, according to the SBV. Banks were also told tominimise inconveniences and facilitate problem-solving to supportcustomers. 

In an earlier meeting with commercial banks and governmentalagencies, Deputy Prime Minister Le Minh Khai stressed the importance ofcontinuing with cost-cutting measures, reducing deposit rates, promotingeconomic development and granting businesses easier access to funds.

"Establishing a reasonable and sustainable deposit rate iscrucial to our efforts to adjust lending rates," he said.

Businesses and banks must realise they are in this together. Bankswill go well when businesses do well, he added. 

He said top priorities for the SBV in the near future include themanagement of credit growth, interest rates, exchange rates and connectivity inthe banking sector. Stronger efforts are also required to improve the sector'stransparency, the business environment, the macroeconomy, exchange rates andthe stability of the commercial banking system.

Khai urged the SBV, governmental ministries and commercial banksto provide timely information to the public and take additional steps to handlecases of harassment, corruption and group interests./.