Press release on issuance of Circular No.26/2022/TT-NHNN
On December 31, 2022, the Governor of the State Bank of Vietnam (SBV) issued Circular No.26/2022/TT-NHNN amending and supplementing a number of Articles of Circular No.22/2019/TT-NHNN dated November 15, 2019 stipulating the regulatory limits and ratios to ensure capital adequacy in the operations of banks and foreign banks’ branches.
The new Circular amends and supplements Point a of Paragraph 4 of Article 20, and Paragraph 2 of Article 24 of Circular No. 22/2019/TT-NHNN, with details as follows:
When calculating the ratio of loan outstanding over the total deposits, banks and foreign bank branches are allowed to take into account a part of the term deposits of the State Treasury, with a descending roadmap, specifically: (i) from the effective date of this Circular until December 31, 2023: subtracting 50% of the total deposit outstanding of the State Treasury; (ii) from January 1, 2024 until December 31, 2024: subtracting 60% of the total deposit outstanding of the State Treasury; (iii) from January 1, 2025 until December 31, 2025: subtracting 80% of the total deposit outstanding of the State Treasury; and (iv) from January 1, 2026: subtracting 100% of the total deposit outstanding of the State Treasury.
Any commercial bank which has not yet met the regulatory ratio of capital adequacy as stipulated in Circular No.41/2016/TT-NHNN shall implement a roadmap for full compliance with this regulatory ratio in accordance with the approved Plan of restructuring in association with NPL resolution upon receiving feedbacks from the competent authorities in line with Decision No.689/QD-TTg. Before the full compliance with Circular No. 41/2016/TT-NHNN, commercial banks shall implement the capital adequacy ratio in line with Circular No.22/2019/TT-NHNN.
This new Circular is composed of three (03) Articles.
This new Circular takes effect from December 31, 2022.
Translated by Le Hang