Financial institutions forbidden to negotiate interest rates on real estate loans

Hanoi (VNA) – Financial institutions are forbidden to negotiate interest rates on
real estate loans or loans to finance investments in financial assets like gold,
securities or foreign currencies, production or business, the State Bank of Vietnam
(SBV) has said.
In Circular No 1/2009/TT-NHNN issued by the central bank back on January 23, which
provided that lenders and borrowers could negotiate interest rates on consumer
loans and credit cards, the State Bank did not mention what sectors were banned
from negotiating interest rates.

The SBV on Nov. 13 responded to rumors that commercial banks were also negotiating
interest rates on loans to finance gold, foreign currency, securities and property
investments, markets which all have recently become overheated.

The State Bank ordered financial institutions end such lending practices no later
than March 31 of next year, requiring State Bank branches to be responsible for
inspecting and verifying the compliance of financial institutions and reporting
monthly to it.-Enditem