The ratio of short-term capital used to make long-term loans now needs to be reduced as required by the central bank, but it has been rising steadily in recent months, especially at private banks. A sharp rise Data updated by the State Bank of Vietnam (SBV) showed that the ratio of short-term capital used for making long-term loans hit 28.78% at the end of August 2023, rising by 3.22 percentage points against early this year. This ratio has since early this year increased steadily at a time when banks need to lower the ratio in line with new regulations. Specifically, under prevailing regulations, as of October 1, 2023, the ratio of short-term capital used for long-term lending must be lowered to 30% from the previous cap of 34%, though certain experts have proposed that the new rules be waived for one more year. Earlier, the SBV had demanded faster reduction of the ratio, as specified in its Circular 22/2019/TT-NHNN issued three years ago. Accordingly, this ratio should have been lowered to 37% in October 2020 from the previous ceiling of 40%, to 34% in October 2021, and 30% one year later. However, due to the Covid-19 pandemic, the SBV has […]
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