HCM City (VNA) - A gap hasopened up between deposit interest rates offered by different categories ofbanks due to differences in their liquidity, cash demand and status.

Small- and medium-sized banks have hikedtheir interest rates.

The Saigon Commercial Bank has increasedits rates for six-month deposits to 7.65 percent for customers aged under 40and 7.7 percent for older ones.

The Viet Capital Bank, GPBank, Bac A Bank,NCB, and DongA Bank have raised their six- month rate to 7 percent or above.

But at large State-owned banks like BIDV,VietinBank and Vietcombank, they remain at 5.1-5.3 percent.

Mid-sized lenders offer 6.8 percent.

The difference in rates between small andlarge lenders is 2-2.6 points for six-month deposits.

Analysts have attributed this todifferences in liquidity, cash demand and health of banks.

According to the National FinancialSupervisory Committee (NFSC), liquidity is abundant at strong banks.

“Some small credit institutions and thoserestructuring are facing difficulties in getting low-interest capital on theinter-bank market, and thus have to maintain or raise their deposit interestrates.”

Nghiem Xuan Thanh, Chairman of Vietcombank(VCB), said his bank, which has the lowest interest rates in the industry,said: “Last year, the bank’s rate was among the lowest but had the highestdeposit growth rate due to its prestige and branding. The low deposit interestrate has helped keep loan interest rates low compared to other creditinstitutions.”

Analysts warned depositors to be carefuland select a trustworthy bank to deposit their money since the NationalAssembly has passed a law for declaring troubled banks bankrupt through anamendment to a law on the operation of credit organisations, which takes effectthis year.

As a result, large, State-owned banks findit easy to get deposits while smaller ones are struggling.

But the analysts also admitted that thepossibility of bankruptcy is extremely low in the next few years.

Truong Thanh Duc, Chairman of Basico LawCompany, said the State Bank of Vietnam (SBV) should publicise informationabout the operations of banks for the benefit of depositors.

It is important to control credit growth toreasonable levels and focus on priority areas, he said.

In 2017, many lenders achieved largeprofits due to strong credit growth. This year, the State Bank of Vietnam hasset a credit growth target of 17 percent, but many banks expect that to behiked after the first half of the year.

At a recent conference, SBV’s Deputy GovernorDao Minh Tu said the central bank had warned 15 lenders for increasing creditto non-priority sectors.

Nguyen Duc Thanh, chief of the VietnamInstitute for Economic and Policy Research, said credit had reached 135 percentof the country’s GDP, or close to levels that could pose a risk to the bankingsystem. - VNA