Accordingly, the SBV requires credit institutions and foreign bank branches (collectively referred to as “credit institutions”) to seriously focus on implementing their business operations and translating the policies and measures of the Party and the State into practice in the coming period. The key requirements are as follows.
Ensuring system safety and monetary market stability
Credit institutions must seriously and effectively implement a number of tasks and measures to ensure the safety of the system and contribute to monetary market stability. In particular, they must strictly comply with Directive No. 01/CT-NHNN dated 9 January 2026, issued by the Governor of the SBV, on the implementation of key tasks for the banking sector in 2026. The Directive aims to maintain macroeconomic stability and the safety of the credit institution system, support sustainable economic growth and control inflation in line with established targets.
Credit institutions must strictly comply with the Government’s, the Prime Minister’s and the SBV’s regulations and directives on interest rates. They are required to mobilise all available resources, reduce operating costs, share profits and implement coordinated, decisive measures to lower the overall interest rate level.
As an immediate measure, credit institutions must reduce their listed deposit rates by at least 0.5 percentage points per annum for maturities of six months or longer. They must not engage in a race to raise deposit rates or resort to unfair competition that could destabilise financial and monetary security. Lending rates must also be reduced, with a focus on lowering rates by 1.5–2 percentage points per annum for production and business activities and priority sectors.
Credit institutions must also implement measures to ensure safe and effective credit growth, directing credit towards production and business activities, priority sectors and key drivers of economic growth. Credit should be extended to feasible major infrastructure works and projects that serve socio-economic development, as well as to sectors and industries that the Government and the Prime Minister have identified for support. These include science and technology, innovation, digital transformation, green transformation, the digital economy, the green economy, the circular economy, education and training, and cultural industries.
Credit institutions are encouraged to strengthen syndicated lending to finance large-scale projects. However, they must not lower credit-granting standards or compromise credit quality in pursuit of larger lending volumes.
A balanced and sustainable relationship between capital mobilisation and lending must be maintained. Credit institutions should regularly review the structure of their funding by currency and maturity, while diversifying funding channels. Liquidity risks and maturity mismatches must be controlled through close monitoring of the use of short-term funds for medium- and long-term lending. At the same time, credit institutions should increase the proportion of medium- and long-term funding to ensure a sustainable balance between funding sources and their uses.
Credit institutions must regularly review, inspect and audit their internal regulations and credit products. They must improve the quality of credit appraisal and verify customers’ actual financing needs, promptly identifying and addressing cases in which customers provide inaccurate information or use borrowed funds for purposes other than those approved.
Strengthening control over high-risk credit activities
Credit institutions are required to exercise strict control over lending to high-risk sectors and to customers or customer groups with large outstanding credit balances.
Particular attention must be paid to monitoring and assessing credit concentration risks involving customer groups and related persons, credit exposures by customer, and large-scale projects. Credit institutions should pay special attention to customer groups displaying one or more of the following characteristics: a common manager or legal representative; a common owner holding more than 5% of a customer’s charter capital; shared collateral or collateral owned by the same person; financing concentrated in the same project; or a common source of debt repayment.
Credit institutions must diversify their credit portfolios and combine these assessments with indicators relating to real estate price movements, market liquidity, unsold project inventory and corporate bond issuance. This will help identify violations, weaknesses and potential risks at an early stage, enabling timely and appropriate control and remedial measures.
Credit institutions must strictly control lending to organisations and individuals for the following purposes:
(i) Paying for capital contributions to, or the purchase or acquisition by transfer of, capital contributions in limited liability companies or partnerships; or paying for the purchase or acquisition by transfer of shares in joint-stock companies that are not listed on the stock market or registered for trading on the Unlisted Public Company Market (UPCoM).
(ii) Paying capital contributions under capital contribution agreements, investment cooperation agreements or business cooperation contracts for investment projects that do not satisfy the legal conditions for being put into business at the time the credit institution decides to grant the loan.
(iii) Reimbursing financial expenditures, except where the loan fully satisfies all the following conditions:
a) The customer has advanced its own funds to pay expenses incurred in implementing a business project, and those expenses were incurred less than 12 months before the credit institution’s lending decision.
b) The expenses paid using the customer’s own funds relate to the implementation of the business project and are eligible to be financed by the credit institution under the capital-use plan submitted to the institution for consideration of a medium- or long-term loan for that project.
The creation of credit application dossiers for the purposes listed above is strictly prohibited where this is intended to withdraw loan funds for improper use, circumvent lending regulations applicable to a single customer or a group of related customers, evade credit-granting conditions or credit limits, or avoid regulatory oversight of cash flows. Such practices could pose significant risks to the safety of the credit institution system.
The SBV will impose strict sanctions on violations involving the provision of credit to organisations and individuals for the above purposes.
In addition, outright purchases without recourse of documentary instruments under letters of credit issued by the purchasing credit institution must be subject to risk controls equivalent to those applied to other credit activities. Credit institutions must conduct a comprehensive assessment of the substance of each transaction, the counterparties, payment sources, cash flows and other relevant factors in order to identify, assess and control risks.
Credit growth must not exceed the maximum outstanding credit balance for 2026 notified by the SBV, less the outstanding balance of outright purchases without recourse of documentary instruments arising during 2026.
Credit institutions must strengthen controls over the quality of credit appraisal and approval, as well as collateral management. Particular attention must be paid to the appraisal and revaluation of collateral where such assessments result in an increase in collateral value. Credit institutions must review their practices to ensure full compliance with applicable laws and internal regulations governing the acceptance, valuation, management and disposal of collateral.
Collateral must be valued in line with market prices, with its value regularly updated and reassessed. The loan-to-value ratio must be determined in a manner appropriate to the level of risk and the characteristics and liquidity of each type of collateral.
Credit institutions must closely monitor the condition and value of collateral throughout the life of a loan. Where collateral values decline, they must promptly take appropriate measures to obtain additional collateral, adjust arrangements or dispose of collateral, as necessary, to ensure debt recovery and minimise losses in the event of risk materialisation. They should also proactively coordinate with relevant authorities to resolve difficulties and obstacles relating to collateral disposal and debt recovery.
Improving debt quality and strengthening financial resilience
The SBV requires credit institutions to closely monitor developments in debt classifications, particularly Group 2 debt and non-performing loans (NPLs). They must strengthen the monitoring and management of potentially risky debts, off-balance-sheet debts, and debts that have been restructured or granted revised repayment schedules.
Credit institutions should regularly assess customers’ recovery prospects, update their risk assessments and implement appropriate control measures. These actions are intended to ensure the timely handling and recovery of debts falling due or overdue, and to prevent them from becoming non-performing loans.
Particular attention must be paid to credit institutions with large-scale operations and high rates of NPL growth. These institutions must closely monitor and manage their credit exposures, proactively review and assess the causes of rising NPLs, and promptly implement remedial measures to control risks and ensure operational safety.
Credit institutions must review and fully comply with applicable laws and internal regulations on debt classification and provisioning. They must ensure that credit quality is reported truthfully, without concealing NPLs or delaying the recognition of risks, and that risk provisions are made fully and promptly in accordance with regulations.
They must also develop plans to strengthen financial capacity and improve NPL coverage ratios, thereby enhancing resilience to adverse changes in the business environment. Debt collection and NPL resolution should be accelerated, with a diversified range of resolution measures employed rather than relying primarily on the use of risk provisions.
Credit institutions must also exercise strict control over accrued interest receivable, particularly large amounts, long-outstanding items and amounts that may be difficult to recover. The recognition, accounting and reversal of accrued interest must comply with applicable laws and the SBV’s directives. Dividend payments and profit distributions must likewise be controlled to ensure that reported business results accurately reflect the institutions’ actual operating conditions.
Interest expenses must be managed at a reasonable level in line with the income-generating capacity of credit activities. At the same time, credit institutions should diversify their revenue structures, expand service-based and non-credit activities, and gradually reduce their dependence on net interest income.
Credit institutions must strengthen the management and recovery of debts falling due in order to improve business performance, reinforce financial capacity and support sustainable growth.
They must also improve management, executive leadership, risk management, internal control and internal audit capabilities, while strengthening compliance with laws, operational discipline and professional ethics in banking. Compliance with prudential limits and ratios must be ensured. Inspection, internal control and internal audit activities must be intensified across business operations, with particular attention to credit extension, debt classification and credit risk provisioning.
Transactions with shareholders and their related persons must be strictly controlled. Credit institutions must also establish and issue criteria for identifying persons related to customers in accordance with the law, including criteria for identifying “other legal entities and individuals with potentially risky relationships” under Point g, Clause 24, Article 4 of the Law on Credit Institutions.
Based on their internal criteria for identifying legal entities and individuals whose relationships may pose operational risks, credit institutions must proactively review their entire portfolio of large-balance customers and groups of legal entities and individuals with potentially risky relationships. Appropriate measures must be taken to prevent and address risks.
Strengthening accountability and regulatory compliance
Risk control and the safety of the credit institution system are critically important to the country’s economic development, security, public order and social safety. Accordingly, the legal framework governing banking activities will continue to be improved to ensure effective and substantive control over share ownership, customers and related customer groups, and the purposes for which loans are used.
The Boards of Directors, Boards of Members and General Directors (Directors) of foreign bank branches must communicate these requirements to their institutions’ shareholders, management and executive teams, and relevant employees throughout their systems. They must ensure that these parties conduct self-assessments and compliance reviews, identify potential issues, and proactively restructure or adjust their operations and establish appropriate remediation roadmaps in accordance with applicable regulations and directives issued by competent authorities.
During implementation, any difficulties or obstacles, or any need for support from the SBV, must be reported together with specific proposals and recommendations.
The SBV requires the Chairpersons of Boards of Directors and Boards of Members, General Directors (Directors), Heads of Supervisory Boards, and the relevant inspection, audit, control, monitoring and compliance units of credit institutions to take responsibility for implementing the SBV’s directives set out in this Official Letter. They are also accountable for the safety and effectiveness of their institutions’ operations.
From now until the end of 2026, the SBV will consider applying the following measures to credit institutions that fail to comply with, or seriously implement, the Government’s, the Prime Minister’s and the SBV’s directives on interest rates, or engage in unfair competition that destabilises the market or creates risks for banking operations. These measures will be applied in addition to sanctions prescribed by law and will take into account the nature and level of risk involved:
(i) Reviewing the institution’s credit growth target for the remainder of 2026 and assigning it a low credit growth target for 2027.
(ii) Requiring the institution to comply with one or more prudential ratios at levels higher than the prescribed minimum requirements.
by VNBA News
