SBV Draft Circular Eases Liquidity Rules for Vietnamese Banks, TCB, VPB, MBB

Overview

The State Bank of Vietnam (SBV) is seeking public comment on a draft circular to replace Circular 22/2019/TT-NHNN, which governs prudential ratios for banks. The key proposed change allows banks to count a portion of State Treasury deposits as mobilized capital, easing a major liquidity constraint. This is expected to lower funding costs and support sustainable interest rate reductions, benefiting major commercial banks including TCB, VPB, and MBB.

Key Facts

• The SBV is consulting on a draft circular to replace Circular 22/2019/TT-NHNN, which sets limits and safety ratios for banks.
• The draft allows banks to count part of State Treasury deposits as mobilized capital, reversing a previous rule that excluded them entirely.
• Under the current rule, State Treasury deposits are excluded from the loan-to-deposit ratio (LDR) calculation, creating a liquidity bottleneck.
• The previous circular had a roadmap to fully exclude State Treasury deposits by 2026, which would have worsened liquidity.
• VDSC (Rong Viet Securities) notes that long-term lending cannot be matched by State Treasury deposits or short-term market measures, requiring instruments like CDs and institutional bonds.
• The change is expected to help lower banks’ cost of funds (COF) and support a more sustainable reduction in lending rates.
• The draft circular is part of broader efforts to address structural liquidity issues in the banking system.

What Happened

The State Bank of Vietnam has released a draft circular for public consultation that would replace Circular 22/2019/TT-NHNN, which sets prudential limits and safety ratios for banks and foreign bank branches. The most significant proposed change is the inclusion of a portion of State Treasury deposits in the calculation of mobilized capital, which was previously excluded entirely. According to VDSC, the exclusion of these deposits had created a liquidity bottleneck, particularly for state-owned banks (Big4), as they could not use these funds for lending to the real economy.

The draft circular addresses concerns raised by commercial banks that the previous rule’s roadmap to fully exclude State Treasury deposits by 2026 would have exacerbated liquidity problems. By allowing these deposits to count toward the loan-to-deposit ratio (LDR), the SBV aims to improve the circulation of funds within the banking system and reduce upward pressure on lending rates.

Market Context

On April 15, 2026, TCB closed at VND 32,000 (-0.16%), VPB at VND 27,000 (unchanged), and MBB at VND 27,000 (-0.37%), with all three stocks trading on HOSE. The banking sector has been under pressure from high funding costs and tight liquidity, with short-term rate cuts having limited impact on longer-term funding instruments like CDs and institutional bonds. The proposed regulatory change is seen as a structural fix that could improve net interest margins (NIMs) for banks with significant State Treasury deposit holdings.

Strategic Significance

For long-term investors, the proposed circular represents a targeted regulatory intervention to address a structural liquidity mismatch in Vietnam’s banking system. By allowing State Treasury deposits to be counted as mobilized capital, the SBV is effectively increasing the pool of funds available for lending without requiring banks to raise more expensive deposits or issue costly instruments. This should lower the cost of funds for banks like TCB, VPB, and MBB, potentially improving their NIMs and profitability. The move also signals the SBV’s commitment to sustainable interest rate reduction, which could support credit growth and economic expansion.

What to Watch

• Final approval and effective date of the new circular, expected in the coming months.
• Q2 2026 earnings reports from TCB, VPB, and MBB for signs of improving NIMs and lower COF.
• SBV’s next monetary policy meeting for any complementary rate cuts or liquidity measures.
• Changes in the LDR ratios of major banks, particularly the Big4, as they adjust to the new rules.
• Market reaction in banking stocks, especially foreign investor flows, as the regulatory clarity improves.