The State Bank of Vietnam (SBV) issued Circular No. 22/2019 providing limits and prudential ratios in the operations of banks and foreign bank branches. The circular takes effect from 1/1/2020, stipulating the roadmap to gradually reduce the maximum rate of short-term capital for medium and long-term loans.
Specifically, from January 1, 2020 to September 30, 2020, this figure is 40%. Period from October 1, 2020 to September 30, 2021, the maximum rate is 37%, from October 1, 2021 to September 30, 2022 is 34%, after October 1, 2022 is 30%.
Earlier, in the draft opinion, SBV proposed two options on the short-term capital tightening schedule for medium and long-term loans with the latest deadline to bring this ratio to 30 percent after July 1, 2022.
Besides reducing the ratio of short-term capital for medium and long-term loans, SBV increased the risk of real estate business from 150 percent to 200%. For other receivables with a value of four billion dong or more (after deducting claims from customers who have applied the risk factor of 50%), the risk factor of 120 percent will be applied, effective from 1/1/2020 to the end of 31/12/2020 and then will increase to 150 percent from 1/1/2021.
In the draft, if the claim of an individual serving the living demands that the principal outstanding of a customer is valued at three billion dong or more, the risk coefficient is 150%.
