Vietnam's central bank loosens credit rules as banks lend over VND 1 trillion

From the end of May to early July 2024, the State Bank of Vietnam (NHNN) issued a series of regulatory adjustments aimed at expanding credit capacity. It revised the loan‑to‑deposit ratio (LDR) calculation to include 20 % of Treasury deposits, raised the ceiling for using short‑term funds to grant medium‑ and long‑term loans from 30 % to 40 %, and increased the real‑estate credit room for 25 commercial banks, exempting loans for social housing, industrial zones and export‑processing areas from the 2026 credit‑growth cap. A special mechanism also excluded debt from 18 large projects of Vingroup, Sun Group and Masterise from banks’ credit‑growth limits.

In the first half of 2024, banks responded by extending more than VND 1.08 quadrillion (about US$ 44 billion) of new loans, with the bulk directed to manufacturing, construction, agriculture, trade, transport and telecom sectors. The rapid loan expansion has widened the gap between deposits and lending, creating pressure on interest rates and liquidity. NHNN’s recent technical measures, such as adjusting Treasury‑fund inclusion in LDR, aim to mitigate these pressures while maintaining overall system risk controls.