Banks cut interest rates, offer financial support to Typhoon-affected customers

In response to the State Bank of Vietnam's directive to lower and exempt loan interest rates, restructure debt, and support new borrowers impacted by Typhoon Yagi, commercial banks have begun announcing rate cuts to improve access to consumer loans and prevent the use of "black market" credit.

On the afternoon of September 12, VPBank (Vietnam Prosperity Joint-Stock Commercial Bank) launched an interest rate relief program for individual customers affected by Typhoon Yagi.

Specifically, VPBank will reduce interest rates by 1 percent for medium- and long-term loans, and by 0.5 percent for short-term loans.

The program will run from September 13 to December 31, 2024, and applies to all provinces and cities directly impacted by Typhoon Yagi, such as Quang Ninh, Hai Phong, Hanoi, Thai Nguyen, and Yen Bai.

In addition to lowering loan interest rates, VPBank offers a preferential fixed rate of 6.5 percent per year for the first 12 months to customers who wish to repay loans early at other banks or apply for home purchase, construction, or renovation loans.

On the same day, Vietnam Maritime Commercial Joint Stock Bank (MSB) announced a 1 percent interest rate reduction for small and household businesses impacted by storms and floods.

From now until December 31, 2024, MSB will reduce loan interest rates by 1 percent per year compared to current rates for household businesses with loan terms of up to 60 months.

For new household business customers, MSB offers an unsecured loan package with limit  s up to VND2 billion at interest rates starting from 11.5 percent per year, and secured loans up to VND20 billion with rates starting from 5.8 percent.

For small-sized businesses, MSB offers a mortgage loan package up to VND6 billion with interest rates starting from 4.99 percent, and unsecured loans up to VND2 billion with rates starting from 7.7 percent. These loans come with terms of up to 36 months and support various needs, including working capital, medium- and long-term loans, overdrafts, credit cards, and trade financing.

A representative from MSB commented, "With high credit limit  s, long-term options, and diverse support purposes, coupled with preferential interest rates, streamlined processing, and convenient online applications, this package provides significant support to household businesses recovering from the storm."

Agribank has announced plans to assist customers affected by Typhoon Yagi. Deputy General Director Doan Ngoc Luu revealed that Agribank has instructed ABIC Insurance to expedite support and compensation procedures to ensure timely help for affected customers.

Agribank has also set up field assessment teams to evaluate the damage to borrowers, estimate affected loan balances, assess repayment capabilities, restructure debts, reduce interest rates on existing loans, and provide new loans to aid business recovery and stability.

To help people quickly stabilize their lives after the storm, in line with the State Bank of Vietnam's directive, a representative from the National Payment Corporation of Vietnam (NAPAS) suggested that using domestic credit cards can be an effective way to access official credit sources. This approach can help address urgent consumer needs and avoid "black market" lending.

"Domestic credit cards allow people to make purchases and cover essential expenses with deferred payments. They offer a grace period of 45 to 55 days, which supports those facing sudden financial needs without requiring a visit to the bank for loan processing. This method helps avoid high-interest 'black market' loans," the NAPAS representative said.

NAPAS noted that credit cards issued by banks such as Agribank, VietinBank, Sacombank, ACB, NAB, HDBank, Vietbank, Baovietbank, VCB, OCB, Viet A Bank, as well as financial companies like Vietcredit, FCCom, Mirae Asset, and Mcredit, have simple application processes, low issuance fees, and low payment costs, making them a practical option for consumers.