HCMC – The State Bank of Vietnam’s (SBV) Region 2 branch has warned commercial banks in HCMC and Dong Nai Province about loan risks tied to real estate down payments.
In a notice sent to local commercial banks, the SBV Region 2 asked lenders to suspend loans used for down payments under agreements between customers and real estate brokers or consultants until official conclusions are issued by competent authorities.
The warning follows recent findings by regulators and courts of multiple violations in property down payment agreements prepared by consulting and brokerage firms.
Banks have been told to monitor developments closely, including rulings from courts and directions from local departments, to handle disputes in line with legal requirements. For existing loans, lenders must work with customers, brokers, and project developers to protect borrowers’ legal rights.
If the authorities later confirm that such agreements comply with the law, banks may resume lending but must establish clear internal procedures to limit risks and ensure customer protection. Lenders are also advised to inform clients of potential risks and include clauses to temporarily freeze funds to prevent misuse and disputes.
The SBV Region 2said banks could face legal, financial, and reputational risks if lending for down payments is not tightly controlled.
Courts in HCMC have recently handled cases where down payment agreements were ruled invalid for violating regulations. In early October, the HCMC Department of Construction fined a real estate consulting and brokerage company for conducting transactions without meeting legal conditions and later banned firms from authorizing others to sign down payment or sales contracts.
Previously, the Department of Construction of the former Binh Thuan Province also issued a similar directive tightening oversight of property transactions.
According to the SBV Region 2, lending for down payment exposes banks to potential bad debt if projects are delayed, suspended, or fail to meet legal requirements. In such cases, banks may struggle to recover loans and could face customer complaints when disputes arise with brokers or consultants.
The SBV Region 2 said the move aims to strengthen risk control and ensure safe lending practices in the property market.
