Consolidated Document 44/VBHN-NHNN: Safety Limits and Ratios for Banks and Foreign Bank Branches (updated through Circular 08/2026/TT-NHNN)
RegHub explainer by New MarketerLast updated:
Based on:44/VBHN-NHNN - Government Official Gazette
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
This is Consolidated Document No. 44/VBHN-NHNN, combining Circular 22/2019/TT-NHNN (which sets the safety limits and ratios banks and foreign bank branches must maintain) with four rounds of amendments, the latest being Circular 08/2026/TT-NHNN, effective 15 May 2026. It applies to state-owned commercial banks, cooperative banks, joint-stock commercial banks, joint-venture banks, 100%-foreign-owned banks, and foreign bank branches operating in Vietnam. The core prudential ratios are: a minimum Capital Adequacy Ratio (CAR) of 9% (both standalone and consolidated); credit-concentration caps of 5% of charter capital (or allocated capital) each for credit extended to invest in corporate bonds and credit extended to invest in shares, only permitted when the bank's non-performing loan ratio is below 3%; a minimum liquid reserve ratio of 10%; a 30-day liquidity coverage ratio (minimum 50% for VND when net outflow is positive; minimum 10% FX for commercial banks and 5% for foreign bank branches and cooperative banks); and a maximum loan-to-deposit ratio (LDR) of 85%. The notable update is that Circular 08/2026/TT-NHNN revised how «total deposits» are counted for the 85% LDR cap, excluding escrow deposits, deposits for designated purposes, State Treasury demand deposits, and 80% of State Treasury term deposits. This does not create a direct compliance obligation for non-bank businesses, but it changes how much lending room banks have, which can indirectly affect credit availability for SMEs and foreign-invested companies that borrow from Vietnamese banks or foreign bank branches.
Overview
Consolidated Document No. 44/VBHN-NHNN combines Circular 22/2019/TT-NHNN dated 15 November 2019 (issued by the Governor of the State Bank of Vietnam, setting the safety limits and ratios banks and foreign bank branches must maintain) with its amending circulars: 08/2020/TT-NHNN, 26/2022/TT-NHNN, 09/2024/TT-NHNN, and most recently 08/2026/TT-NHNN, effective 15 May 2026.
Scope and applicability
The circular applies to: state-owned commercial banks, cooperative banks, joint-stock commercial banks, joint-venture banks, 100%-foreign-owned banks; foreign bank branches; and related organizations and individuals. The ratios that must be maintained on an ongoing basis include: minimum capital adequacy ratio, credit extension limits, liquidity/payment-capacity ratios, the ratio of short-term funding used for medium- and long-term lending, the ratio for holding/investing in government bonds, capital-contribution and share-purchase limits, and the loan-to-deposit ratio.
Minimum capital adequacy ratio (CAR)
Banks must maintain both standalone and consolidated CAR of at least 9%; foreign bank branches must maintain a minimum CAR of 9%. Formula: CAR = Own capital / Total risk-weighted assets x 100%. This requirement does not apply to banks or branches that already compute CAR under the Basel II standard set out in Circular 41/2016/TT-NHNN.
Credit limits for corporate-bond and share investment
Banks may only extend credit for up to one year to customers investing or trading in corporate bonds or shares, and only if the bank's non-performing loan ratio is below 3% and it fully complies with risk-management and internal-control requirements. Total outstanding credit extended for either purpose may not exceed 5% of the bank's or branch's charter capital (allocated capital). The circular lists numerous prohibited scenarios, such as when the collateral is the credit institution's own shares/bonds or those of its subsidiary, or when the borrower is a related party under the Law on Credit Institutions.
Liquidity (payment-capacity) ratios
- Minimum liquid reserve ratio: 10% (highly liquid assets / total liabilities).
- 30-day liquidity coverage ratio, calculated separately for VND and foreign currency. Where net cash outflow is positive, banks must maintain at least 50% for VND; for foreign currency, at least 10% for commercial banks and 5% for foreign bank branches and cooperative banks.
- If a bank falls short, it must take immediate self-remedy measures (borrowing from other credit institutions, irrevocable commitments, etc.) and report to the State Bank before 10:00 a.m. the next day; if self-remedy measures consume 20% or more of highly liquid assets, the State Bank applies additional supervisory measures.
Loan-to-deposit ratio (LDR) and the 2026 amendment
The LDR cap is 85%, calculated as Total outstanding loans / Total deposits x 100%. Circular 08/2026/TT-NHNN (effective 15 May 2026) amended point a) of clause 4, Article 20, changing how «total deposits» (the denominator) is calculated: it now excludes escrow deposits, deposits for designated purposes, State Treasury demand deposits, and 80% of State Treasury term deposits. This is a technical change, but it can shrink the LDR denominator at banks with a large share of State Treasury deposits, tightening their lending headroom.
Why this matters for businesses
This circular does not impose direct reporting or compliance obligations on non-bank businesses. However, the CAR, LDR, and liquidity limits determine how much the banking system can lend overall, which indirectly affects SME access to credit, particularly when a bank breaches a safety ratio and has to pull back on lending. Foreign-invested businesses that bank with foreign bank branches in Vietnam should also note the separate, tighter thresholds that apply to that group (for example, a 5% FX liquidity requirement instead of 10%).
Note: this summary is based on the verified sections of the source (scope, CAR, credit limits, liquidity ratios, LDR); the numeric detail in Sections 5-7 (short-term-funds-for-long-term-lending ratio, government bond investment ratio, capital-contribution/share-purchase limits) and the appendices was not fully checked in this pass.