Circular No. 08/2020/TT-NHNN amends and supplements the maximum ratio of short-term capital used for medium- and long-term loans of banks and foreign bank branches according to a timeline from 2020 to 2023.
Scope of application
Banks and foreign bank branches
Key points
- Banks and foreign bank branches must comply with the maximum ratio of short-term capital used for medium- and long-term loans according to a timeline from 2020 to 2023 (Article 1)
- From January 1, 2020 to September 30, 2021: the maximum ratio is 40% (Point a, Article 1)
- From October 1, 2021 to September 30, 2022: the maximum ratio is 37% (Point b, Article 1)
- From October 1, 2022 to September 30, 2023: the maximum ratio is 34% (Point c, Article 1)
- From October 1, 2023 onwards: the maximum ratio is 30% (Point d, Article 1)
🌐 Social impact of this document
- Helps banks and foreign bank branches strictly adhere to the limit on the ratio of short-term capital for medium- and long-term loans, ensuring financial safety (benefit)
- May increase difficulties in mobilizing short-term capital to meet the demand for medium- and long-term loans of banks (negative impact)
❓ Frequently asked questions
What is the maximum ratio of short-term capital used for medium- and long-term loans from January 1, 2020 to September 30, 2021?
40% (Point a, Article 1)
What is the maximum ratio of short-term capital used for medium- and long-term loans from October 1, 2023 onwards?
30% (Point d, Article 1)
Which banks must comply with this ratio?
Banks and foreign bank branches (Article 1)
Full text
CIRCULAR
Amending and supplementing certain provisions of Circular No. 22/2019/TT-NHNN dated November 15, 2019 of the Governor of the State Bank of Vietnam
15 November 2019 of the Governor of the State Bank of Vietnam
stipulating limits and ratios to ensure safety in banking operations,
foreign bank branches
Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;
Pursuant to the Law on Credit Organizations dated June 16, 2010;
Pursuant to the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;
Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;
At the proposal of the Director of Banking Inspection and Supervision;
The Governor of the State Bank of Vietnam promulgates this Circular amending and supplementing certain provisions of Circular No. 22/2019/TT-NHNN dated November 15, 2019 of the Governor of the State Bank of Vietnam stipulating limits and ratios to ensure safety in banking operations, branches of foreign banks.
Article 1. Amending and supplementing certain provisions of Circular No. 22/2019/TT-NHNN dated November 15, 2019 of the Governor of the State Bank of Vietnam stipulating limits and ratios to ensure safety in banking operations, branches of foreign banks
Clause 5, Article 16 shall be amended and supplemented as follows:
"5. Banks and branches of foreign banks must comply with the maximum ratio of short-term capital used for medium- and long-term loans according to the following schedule:
a) From January 1, 2020 to September 30, 2021: 40%;
b) From October 1, 2021 to September 30, 2022: 37%;
c) From October 1, 2022 to September 30, 2023: 34%;
d) From October 1, 2023: 30%."
Article 2. Responsibility for Implementation
The Director of the Office, the Inspector General of Banking Supervision, Heads of Units under the State Bank of Vietnam, Governors of the State Bank of Vietnam Branches in provinces and centrally governed cities, banks, and branches of foreign banks are responsible for implementing this Circular.
Article 3. Effectiveness
This Circular takes effect from October 1, 2020./.
DEPUTY DIRECTOR
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