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Circular 46/2024/TT-NHNN, Circular 47/2024/TT-NHNN, and Circular 48/2024/TT-NHNN on interest rates on savings in VND and foreign currencies have just been released by the SBV and will take effect on November 20, 2024 for the entire system.
Specifically, on the application of interest rates on USD deposits of individuals and organizations at credit institutions (CIs) and foreign bank branches (collectively referred to as CIs), Circular 46/2024/ TT-NHNN, issued on September 30, 2024, states that CIs shall apply interest rates on USD deposits that do not exceed the maximum interest rate determined by the SBV Governor in each period for deposits held by individuals and organizations.
The maximum interest rate on USD deposits deposited in this Circular includes promotional expenses in all forms, applicable to the method of interest payment at maturity as well as other interest payment methods converted to the method of interest payment at maturity.
CIs shall publicly display interest rates in USD deposits at legal transaction counters within their operational network and post them on their websites (if any). Upon receipt of deposits, CIs are not allowed to conduct promotions in any form (in cash, interest rates, and other forms) that are not in accordance with the provisions of the laws.
The scope of the Circular applies to deposits, including forms of receiving deposits as prescribed in Clause 27, Article 4 of the Law on Credit Institutions with the CIs, as well as organizations and individuals making deposits at CIs, are the subjects.
The SBV also stipulates that interest rate agreements on USD deposits made prior to this Circular’s effective date must be upheld by CIs and customers until maturity. The CIs will apply the deposit interest rate specified in this Circular if the agreed date passes and the customer does not show up to withdraw the deposit.
On the same day of September 30, 2024, the SBV issued Circular 47/2024/TT-NHNN amending Clause 3, Article 3 of Circular No. 04/2022/TT-NHNN dated June 16, 2022 by the SBV Governor regulating the application of interest rates for early withdrawal of deposits at CIs.
The Circular specifically amended Clause 3, Article 3 of Circular No. 04/2022/TT-NHNN on "Certificates of deposit issued by CIs".
Previously, the provisions of Clause 3, Article 3, Circular No. 04/2022/TT-NHNN stipulated the application of regulations on interest rates for early withdrawal of deposits to organizations (excluding CIs and foreign bank branches) and individuals depositing money at CIs and foreign bank branches, including "Certificates of deposit, promissory notes, bills and bonds issued by CIs".
Circular 48/2024/TT-NHNN, issued by the SBV on September 30, 2024, also stipulates interest rates on VND deposits. Article 3 of Circular 48/2024/TT-NHNN specifically states that CIs shall utilize interest rates on VND deposits made by individuals and organizations that do not exceed the maximum interest rates set by the SBV Governor for each period and each type of CI, applicable to demand deposits, term deposits of less than one month, and term deposits of one month to less than six months.
Interest rates on VND deposits for individuals and organizations with term deposits of six months or longer will be applied in accordance with the market demand and supply.
The maximum interest rate for VND deposits regulated by the Circular 48/2024/TT-NHNN covers all types of promotional costs. It is applicable to both the method of interest payment at maturity as well as other interest payment methods converted to the method of interest payment at maturity.
The interest rates for VND deposits must be made publicly available at authorized transaction counters within the operational network by the CIs, who will also post them on their websites, if any.
As of November 20, 2024, all these three Circulars will take effect.
Thus, at the same time, the SBV issued a series of Circulars related to savings deposits in foreign currencies and VND. The Circulars are not only "red instructions" for applying interest rates and early withdrawal of deposits specifically for each type of deposit, but also provide "red warnings" to CIs engaged in the "race" of deposit mobilization to hit their targets for deposit growth at the end of the year and the beginning of the following year.
These regulations were promulgated when the amount of deposits in the banking system reached a record high, showing the regulatory authorities' determination to maintain the cost of capital in line with the SBV's targeted operating interest rate structure.
According to the SBV's official data, enterprise and organization deposits at banks as of the end of July 2024 amounted to over VND 6,768 trillion, a slight decline of 1.07% from the end of last year. year. In the meantime, the total amount of individual deposits in the banking system reached VND 6,838 trillion by the end of 2023, an increase of VND 305,672 billion, or 4.68% from the end of 2023. This is the largest number of individual deposits into the banking system ever.
Research and International Cooperation Department (translation)
