As SBV regulations cap this ratio at 30 per cent, the group of joint stock commercial banks has been under great pressure to restructure their capital sources and outstanding loans to meet the SBV’s prescribed ratio.
As stipulated in Circular 08/2020/TT-NHNN, both Vietnamese banks and foreign bank branches in Việt Nam are required to reduce the maximum ratio of short-term capital for medium and long-term loans to 30 per cent as of October 1, 2023.
Commercial banks boosted the use of short-term capital for medium- and
long-term lending after the State Bank of Viet Nam (SBV) doubled the
allowed capital beginning February 1, 2015.
Viet Nam must develop its capital market to avoid the current dependence
of long-term investment capital on the banking system, State Bank of
Viet Nam Governor NguyenVan Binh has suggested.
