16 banks to lower loan interests amid Covid-19

Sixteen commercial banks have agreed to reduce interests on existing loans of Covid-hit businesses from now until the end of the year.

The banks include Vietcombank, Vietinbank, BIDV, Agribank, Techcombank, MB, VPBank, TPBank and Sacombank.

Lowering interests is difficult, but this is the time when banks need to share the burden with businesses, said Nguyen Quoc Hung, general secretary of Vietnam Banks Association, at a meeting Monday.

Agribank is committed to lowering its interests by one percentage point on average, while MB will do so for at least one percentage point.

Sacombank will seek shareholder permission as lowering the interest by one percentage point is equivalent to 40 percent of its profit target for the year. Some other banks will do the same.

But not all businesses will be eligible for the reduction. Bank leaders said they would focus on companies truly hurt by the pandemic

“Real estate companies with large profits, export firms or individuals borrowing money to buy cars should not be eligible for the reduction,” said Deputy Director of Techcombank Pham Quang Thang.

He added companies that are essential to the economy with a large workforce should be eligible.