Residents’ deposits as of the end of September reached a record of 7.83 million billion, up nearly 11% compared to the beginning of the year.
According to data from the State Bank, people’s deposits in the banking system by the end of September reached 7.83 million billion VND, an increase of nearly 10.9% compared to the beginning of the year. During the same period as previous years, residential deposit growth was significantly lower.
As for economic organizations, this group’s deposits in the banking system reached 8.35 million billion VND, an increase of 8.9% compared to the beginning of the year.
Savings interest rates were stable as of the end of September, and only started to be adjusted by many banks from October due to credit pressure in the year-end season.
Talking about deposit developments, Mr. Can Van Luc, BIDV Chief Economist and Director of BIDV Training and Research Institute, said that residential deposits in the banking system are cumulative, and always in an upward trend.
According to Mr. Luc, current interest rates are still attractive enough and higher than inflation, so savings are still the choice of the majority when other long-term investment options become risky. In the context of credit increasing stronger than every year, banks also have to find ways to mobilize deposits from the people.
In addition to reflecting people’s need to deposit money, according to Mr. Nguyen Huu Huan, Ho Chi Minh City University of Economics, this year’s sharp increase in residential deposits should be placed in the context of “accelerating” credit, especially in the securities and real estate sectors.
Transaction office at a private bank. Image: Giang Huy
Mr. Nguyen Huu Huan, explained that according to the money creation mechanism of the banking system, an increase in credit will lead to a corresponding deposit. This is the reason why, according to him, deposits in the banking system increased sharply according to the credit growth rate. Capital flowing into investment channels such as real estate and vibrant stocks also leads to cash flow in the banking system.
Mr. Huan took the example of the bank lending to Mr. A, Mr. A will use that money to pay for the purpose of buying real estate, transfer it to Mr. B. After that, Mr. B will leave the money in the bank account, or pay or transfer money to others, causing the cash flow to continue circulating in the banking system.
Also according to data from the State Bank, as of the end of September, the total outstanding debt of the economy was estimated at 17.7 million billion VND, an increase of nearly 14% compared to the end of last year. Meanwhile, credit growth in the same period last year was only about 4%. With the current upward momentum, State Bank leaders forecast that credit growth for the whole year could reach 19-20%, exceeding the plan and the highest in 15 years.
Therefore, according to this expert, credit growth increased sharply in the first months of this year, according to Mr. Huan, not only reflecting “people saving more” but partly the result of cash flow circulating in a vibrant economy.