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Another bank director dismissed for interest rate impropriety   2008-07-17 - TuoiTre

Director of the HCM City Branch of the State Bank of Vietnam Ho Huu Hanh on July 16 sent a dispatch to the management board and General Director of Techcombank requesting the dismissal of Luong Huu Lam, Director of Techcombank HCM City, because the bank applied a lending interest rate higher than the allowed ceiling rate.

 

 
Hanh has also asked for the dismissal of Head of the Transaction Office of the bank Le Duc Tho and Deputy Head of the Thu Duc transaction point.

 

According to the State Bank of Vietnam, Tho lent a client VND350mil at the interest rate of 1.75% per month, or 21% per annum. The mortgage for the loan was a car worth VND526mil. Moreover, the client also had to mortgage his deposit worth 70mil at the bank (or 20% of the value of the loan).

 

On July 1, the transaction office adjusted the lending interest rate applied to a client from 19.6% to 24.4% per annum. Another client said that he got an overdraft of VND24mil from the Thu Duc transaction point, but he had to mortgage VND7.2mil.

 

The State Bank of Vietnam believes that these are actions in violation of the current laws on interest rate policies.

 

Meanwhile, after the violations were discovered, the Director of Techcombank HCM City sent a document to the HCM City Branch of the State Bank of Vietnam, affirming that the bank did not violate the current regulations on interest rate policies.

 

The State Bank of Vietnam thinks that the Director of Techcombank HCM City was trying to shield subordinate officers, and thus has asked for his dismissal as well.

 

On July 16, Hanh also asked the management board and General Director of Sacombank to discipline Le Truc Thuan, Director of Sacombank HCM City branch, for letting subordinate officers release a notice on raising interest rates higher than the ceiling interest rate.

 

Hanh has also asked for the head of Diep Bao Hieu, the Head of the Tan Dinh transaction office of Sacombank HCM City, as he released a notice on raising interest rates (he informed a client that needed to borrow money that the lending interest rate had been raised from 1.5% to 1.92%).

 

The HCM City Branch of the State Bank of Vietnam asked Techcombank to fulfill the requests prior to July 18 and asked Sacombank to fulfill the request prior to July 22.

 

The Governor of the State Bank of Vietnam on July 1 sent a dispatch to VIB Bank instructing it to dismiss the director of the VIB Bank HCM City branch as the branch had violated the interest rate management regulation and the governor’s instruction.

 

VIB Bank HCM City branch lent money to the Saigon Shipping Company and asked the client to pay a security on the loan, which made the real lending interest rate higher than the allowed ceiling level of 21%.



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