SBV Proposes Basel III-Aligned Rules: CDR and NSFR to Replace LDR, Analysts Warn of Credit and Profit Impact

Overview

The State Bank of Vietnam (SBV) has proposed replacing Circular 22/2019 with a new regulation that introduces the Credit-to-Deposit Ratio (CDR) and Net Stable Funding Ratio (NSFR), moving closer to Basel III standards. Analysts warn that the tighter liquidity requirements will constrain credit growth and reduce profitability for Vietnamese banks, including Techcombank (TCB), ACB, and BID.

Key Facts

• SBV released a draft circular on April 29, 2026, to replace Circular 22/2019.
• The new regulation replaces the Loan-to-Deposit Ratio (LDR) with the Credit-to-Deposit Ratio (CDR) and introduces the Net Stable Funding Ratio (NSFR).
• CDR excludes interbank funding from the deposit base, tightening the calculation.
• NSFR will be phased in: 90% in 2028, 95% in 2029, and 100% from 2030.
• Interbank funding accounts for over 18% of total liabilities in the banking system, equivalent to about VND 3.5 quadrillion as of Q1 2026.
• Securities firm SHS estimates that many banks currently fail to meet the proposed 85% CDR threshold.
• The draft is under public consultation; the final regulation is expected to be issued later in 2026.

What Happened

On April 29, 2026, the State Bank of Vietnam published a draft circular to replace Circular 22/2019, which governs prudential ratios for banks. The most significant change is the shift from the Loan-to-Deposit Ratio (LDR) to the Credit-to-Deposit Ratio (CDR) and the introduction of the Net Stable Funding Ratio (NSFR). The CDR excludes interbank borrowings from the deposit base, meaning banks can no longer use interbank funds to meet the ratio. The NSFR, a key Basel III metric, will be phased in gradually, requiring banks to match long-term assets with stable funding sources.

According to securities firm SHS, the new CDR will be challenging for the banking system because interbank funding currently makes up over 18% of total liabilities, or roughly VND 3.5 quadrillion. SHS calculations show that all banks would see their CDR rise compared to LDR, and many would fail the proposed 85% CDR ceiling, potentially limiting their ability to expand credit.

Market Context

On May 13, 2026, TCB closed at VND 33,600 (-0.59%), ACB at VND 22,500 (-0.88%), and BID at VND 42,800 (+2.51%). The banking sector has been under pressure from regulatory tightening, with the SBV also capping credit growth and raising reserve requirements earlier in the year. The proposed rule change adds to headwinds for banks that rely heavily on interbank funding to support lending, particularly those with high loan-to-deposit ratios. TCB, ACB, and BID are all listed on HOSE.

Strategic Significance

The shift to CDR and NSFR represents a structural tightening of liquidity regulation, aligning Vietnam with Basel III standards. For banks like TCB, ACB, and BID, which have grown rapidly by leveraging interbank funding, the new rules will force a rebalancing toward retail deposits and longer-term funding. This could slow credit growth and compress net interest margins, as banks compete for deposits and reduce reliance on wholesale funding. Over the long term, the regulation aims to enhance financial stability but may reduce profitability for banks with weaker deposit franchises.

What to Watch

• Final approval and effective date of the new circular, expected in H2 2026.
• Banks’ Q2 2026 earnings reports, which may show initial impact on lending and margins.
• SBV’s next monetary policy meeting for any adjustments to credit growth targets.
• Changes in banks’ funding mix, particularly the share of retail deposits vs. interbank borrowings.
• Foreign ownership limits and any impact on foreign investor sentiment toward Vietnamese banks.