If you have heard of interbank loan interest rates and interbank loans without knowing what it is. And always ask questions What is the interbank rate?? And why is the interbank loan interest rate higher than other loans. Thongtinbank.com will help you define and understand clearly how interbank interest rates are calculated.

What is the definition of interbank interest rate?

What is the interbank interest rate?? In essence, the interbank loan interest rate is also understood as the interest rate of other loans. The borrower will have to pay an additional amount calculated as a percentage of interest on the loan amount.

The only difference between the interbank interest rate and the interest rate of ordinary loan packages. That is, interbank interest rates will fluctuate and change without people. Interest rates will be much higher than personal loans.

What is the next link?

Interbank interest rate is also known as “overnight interest rate”. This term is commonly used abroad and refers to the interbank loan interest rate.

When you have an interbank loan, pay attention to the interest rate that will fluctuate from hour to hour, day to day. The specific interest rate number will be calculated by the central state bank responsible for giving the calculation number. And published every morning for other banks to actively capture.

At this point, you just need to understand that the bank interest rate is the same as the interest rate of other loan packages. But it will be higher and will be able to change from hour to hour, day to day.

How to calculate interbank loan interest rate you should know

We will have the main problem to decide how to calculate the interbank loan interest rate. That is

  • State bank
  • Lending Bank
  • Banks take out interbank loans

The latest updated interest rate table that banks are applying today:

  • The average overnight interbank loan interest rate will be: 3.85%/year
  • Interbank loan interest rate for 1 week: 4.75%/year
  • Interbank loan interest rate for 2 weeks: 4.94%/year
  • Interbank loan interest rate for 1 month: 5.58%/year
  • Interbank loan interest rate for 3 months: 5.52%/year.
  • Interbank loan interest rate for 6 months: 6.02%/year

Why are interbank interest rates high?

Interbank loan interest rate always high and subject to constant fluctuations. But interbank loans are still chosen by small banks to borrow. Although the interest rate is high, why still borrow?

1) Interbank loans will help borrowers to reserve required capital in accordance with regulations of the State Bank. This is one of the operational criteria that determines the survival of a small and medium-sized bank. Once the required amount is available, the money business will be allowed to operate.

2) The bank has to pay a large amount of money to customers but cannot mobilize capital in time. So interbank loan will be a reasonable and best choice.

What is an interbank loan?

Above, you already know What is the interbank loan interest rate?. But do you know what an interbank loan is, how? If not clear, see the following explanation.

Interbank loan means borrowing capital between large banks and small banks, lacking capital. The interbank loan package is not provided to individuals but only to organizations. If you are an ordinary person, you cannot access to apply for this loan product.

What is the next link?

Interbank lending will only take place between large banks, pouring capital to small banks in need of capital. Large banks have high reserve capital and provide capital for banks that lack capital to continue operating. The loan limit will usually be up to tens of billions of dong and will have a much higher interest rate than normal loan packages.

With such a high interest rate, this is still the best choice of many small banks. Because this solution quickly solves the problem of lack of capital.

Diagram of interbank loans:

– The central state bank will have a leading role and coordinate loans.

– Large banks with high charter capital will be the lenders.

– Small and medium-sized banks with low capital and low market share will be the borrowers.

Can individuals get an interbank loan?

As I said above, interbank loans are not for individual customers. It is only applicable between banks. Even businesses with loan needs are not allowed to participate.

Only state-owned banks or joint-stock commercial banks operating in the country are eligible for loans. To avoid high interest rates when borrowing, banking institutions should ask an intermediary, which is a state bank.

With the above information that I have provided, I hope that you have come to a conclusion What is the interbank rate?. And what is an interbank loan? And if you have other related questions, please leave a comment in the comment section.

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