REQUIRED RESERVE RATIO REDUCED BY HALF FOR CREDIT INSTITUTIONS
As stated in the State Bank Governor’s Circular No. 23/2025/TT-NHNN (Circular 23) of August 12, 2025, amending and supplementing a number of articles of the State Bank Governor’s Circular 30/2019/TT-NHNN of December 27, 2019, on required reserves of credit institutions and foreign bank branches (Circular 30), from October 1, credit institutions as mandatory transferees of commercial banks placed under special control as prescribed in the Law on Credit Institutions will be entitled to 50-percent reduction of the required reserve ratio.
Specifically, support-providing credit institutions defined in Article 4.39 of the Law on Credit Institutions will be entitled to a 50 percent reduction of the required reserve ratio based on the approved recovery plans for credit institutions placed under special control. At the same time, credit institutions as mandatory transferees of commercial banks placed under special control specified in the Law on Credit Institutions will have their required reserve ratio reduced by half based on the approved mandatory transfer plans for commercial banks placed under special control.
The reduction rate of the required reserve ratio for each credit institution mentioned above will be calculated based on the required reserve ratio for that credit institution as stipulated in Article 6.1 of the Circular and applies to all types of deposits subject to required reserves.
Worthy of note, the central bank has added “policy banks” as the fourth category of credit institutions not compelled to set aside required reserves as specified in Article 3 of Circular 30. The three existing categories include: (i) credit institutions placed under special control, (ii) credit institutions not yet having commenced operation, and (iii) credit institutions approved for dissolution or included in a competent agency’s decision on opening of bankruptcy procedures or decision on license revocation.
Article 7 of Circular 23 assigns the Credit Institutions Supervision Department responsibility to notify the SBV’s Operations Center and Monetary Policy Department of required reserve ratio reductions for support-providing and transferee credit institutions under approved recovery or transfer plans. The notice must specify the institutions, start month, and duration of the reduction.
Within three working days of issuance, the Department must also send the Operations Center SBV’s documents on special control, its termination, dissolution, or license revocation of credit institutions (excluding those issued by regional branches). Additionally, the Department will supervise or propose handling of violating institutions.
In the immediate future, the new policy will benefit the four commercial banks that have undertaken mandatory acquisition of poorly-performing banks, including Vietcombank, MB, HDBank and VPBank.