Vietnamese Banks Propose Shorter Dormancy Period for Inactive Accounts

Overview

Vietnamese banks, led by MBBank (MBB), are proposing to shorten the dormancy period for closing inactive accounts from the current 3-year threshold to 1 year. The proposal is part of feedback on the State Bank of Vietnam’s (SBV) draft decree amending regulations on non-cash payments. Other major lenders including Vietcombank (VCB), BIDV (BID), LPBank (LPB), NCB, Sacombank (STB), and VIB have also submitted comments, with some seeking full autonomy to determine the dormancy period. The SBV is reviewing the feedback, which could lead to significant changes in account management practices across the banking sector.

Key Facts

• MBBank proposes closing accounts inactive for over 1 year, instead of the 3-year period in the SBV draft.
• Vietcombank and HSBC want banks to have the autonomy to decide the dormancy period.
• BIDV suggests maintaining accounts with positive balances and closing only zero-balance accounts inactive for 3 years.
• BIDV also recommends exempting specialized accounts (e.g., for direct investment, foreign loans) from dormancy rules.
• LPBank, NCB, Sacombank, and VIB have already been closing or reclassifying inactive accounts, with dormancy periods ranging from 1 to 2 years and minimum balances below VND 50,000.
• The SBV cites fraud risk reduction as the primary reason for the regulation.
• Banks raise concerns about handling residual balances after account closure, as there is no legal basis for transferring funds to the state budget.

What Happened

According to a summary report on the draft decree amending regulations on non-cash payments, MBBank has proposed that banks be allowed to close payment accounts that have had no transactions for over one year. This is a significant reduction from the three-year dormancy period initially proposed by the SBV. The central bank had set the three-year threshold based on international practices, such as the U.S. (3-5 years) and UAE (over 3 years).

However, several banks have been proactively reviewing and closing accounts inactive for more than one year and find this period appropriate. Vietcombank and HSBC have gone further, requesting that the decision on the dormancy period be left to individual banks. BIDV, on the other hand, proposed a differentiated approach: maintain accounts with positive balances, and only close zero-balance accounts that have been inactive for three years from the last transaction. BIDV also suggested excluding specialized accounts used for direct investment, indirect investment, foreign loans, or debt repayment, as many clients need to maintain these accounts for future use despite long periods of inactivity.

Market Context

As of July 30, 2026, MBB shares closed at VND 22,500 on HOSE, while VCB closed at VND 56,500, BID at VND 37,250, and LPB at VND 52,600. The banking sector has been under regulatory scrutiny as the SBV pushes for modernization and risk reduction in non-cash payments. The proposed changes to account dormancy rules could reduce operational costs for banks by cleaning up inactive accounts, but also raise legal and operational questions about residual balances. The sector has seen mixed performance amid broader market volatility, with investors focused on credit growth, asset quality, and regulatory developments.

Strategic Significance

For long-term investors, the proposed regulation signals a shift toward more efficient account management and fraud prevention in Vietnam’s banking system. If implemented, shorter dormancy periods could reduce banks’ administrative burden and IT costs associated with maintaining inactive accounts. However, the lack of clarity on handling residual balances remains a legal risk. Banks that gain autonomy to set dormancy periods may have a competitive advantage in managing operational efficiency. The final decree will likely balance fraud prevention with customer protection, and its impact will vary by bank depending on their account base and existing practices.

What to Watch

• Final SBV decree on non-cash payments, expected in the coming months.
• Banks’ disclosure of inactive account numbers and associated costs.
• Legal framework for handling residual balances after account closure.
• Impact on bank operational expenses and fee income from account maintenance.
• Any divergence in dormancy policies among banks if autonomy is granted.