Vietnam sets a 95% loan-to-deposit cap for banks moving to Basel III liquidity rules

Published 5 Oct 2026Data as of 30 Sep 2026VietnamRegulation

Circular 50/2026/TT-NHNN, issued on 30 September and effective 1 December 2026, sets the maximum loan-to-deposit ratio at 95% for banks that switch to the LCR and NSFR, up from 85% under Circular 22/2019/TT-NHNN, which still applies to a bank until it switches to LCR and NSFR, and counts more funding sources as deposits
Basel III liquidity rules phase in from October 2028: the LCR minimum starts at 50% and reaches 100% in 2033; the NSFR goes from 90% to 100% by 2030
For banks that switch, the extra room arrives while credit growth (10.24% year to date) outpaces deposits (8.77%), but the credit growth target and high funding costs still bind

Facts

The rule: the State Bank of Vietnam (SBV) issued Circular 50/2026/TT-NHNN on 30 September 2026, effective 1 December 2026. It sets safety limits and ratios for commercial banks and foreign bank branches. For banks that apply the LCR and NSFR, the maximum loan-to-deposit ratio (LDR) becomes 95% ¹, up from 85% under Circular 22/2019/TT-NHNN, which still applies to a bank until it switches to LCR and NSFR. The deposit base used in the ratio is widened to include domestic bonds that qualify as Tier 2 capital, entrusted credit funds, and foreign borrowing including international bond issues. Source: VietnamPlus, Nhan Dan and VietnamFinance (October 2026).

Liquidity standards: the liquidity coverage ratio (LCR) minimum starts at 50% on 1 October 2028 ² and rises each year to 100% on 1 October 2033 ³, rising 10 points a year from 50% in 2028. The net stable funding ratio (NSFR) minimum starts at 90% on 1 October 2028 ⁴ and reaches 100% on 1 October 2030 ⁵, after 95% from 1 Oct 2029.

Early adoption: banks may apply before 1 January 2028 to use the LCR and NSFR early, supported by a board assessment and independent auditor confirmation of three consecutive months of compliance. A bank that meets the full standard on both ratios is no longer bound by the LDR ceiling, although it must keep reporting the ratio. Until a bank switches, it continues to comply with and report under Circular 22/2019/TT-NHNN, including that circular's LDR cap; all banks move to the LCR and NSFR on 1 October 2028.

Analysis

Over time, the binding constraint has been funding rather than demand. Credit growth reached 8.38% year to date by late July ⁶ and 10.24% by mid-September ⁷, against deposit growth of 8.77% ⁸. SSI Research put the unadjusted system ratio of credit to deposits at around 112% at end-April ⁹; that figure ignores the regulatory adjustments, but it shows why banks have competed for deposits, with top six- to twelve-month deposit rates at 8% in August ¹⁰ and the average lending rate at 10.7% ¹¹.

For banks that switch, the circular changes both the ceiling and the denominator. Banks with more Tier 2 bonds, entrusted funds or foreign borrowing gain the most room; banks funded mainly by retail deposits gain mainly from the higher ceiling. That favours larger, wholesale-funded lenders in the near term.

The second half of the rule points the other way. The LCR and NSFR replace a simple ratio with requirements that reward stable retail and term funding, and penalise reliance on short-term wholesale money. Over 2028–2033, lenders that fund consumer and SME books with short-term interbank lines will face a rising cost of holding liquid assets.

Implications

ExecutivesMap your LCR and NSFR position now: early adoption, with applications accepted until 1 January 2028, is the route to the higher cap before October 2028, and full compliance removes the LDR ceiling altogether.

InvestorsExpect near-term lending room to accrue unevenly, mostly to early adopters with Tier 2 bonds and foreign funding; deposit-funded banks and banks that stay under the old rules gain less.

OperatorsPartner lenders that adopt the liquidity ratios early may ease funding-driven loan rationing, but price for deposit rates that stay high while the credit growth target binds.

Counterpoints and uncertainties

More lending room does not mean more lending: the SBV still allocates credit growth against a full-year target of about 15% ¹², and some banks are near their quotas. Banks that do not switch early stay under Circular 22/2019/TT-NHNN until 1 October 2028, so near-term room depends on how many banks meet the LCR and NSFR and win SBV approval; bank disclosures of applications will show actual take-up. Faster credit growth into rising inflation and higher lending rates could add to asset-quality strain later.

Figures: see definitions

Maximum loan-to-deposit ratio under Circular 50/2026 (banks applying LCR/NSFR): 95% (up from 85% under Circular 22/2019/TT-NHNN, which still applies to a bank until it switches to LCR and NSFR)
Banks that have not switched keep complying with and reporting under Circular 22/2019/TT-NHNN until 1 October 2028. The circular also widens the deposit base used in the ratio (domestic bonds eligible as Tier 2 capital, entrusted credit funds where the bank bears the risk, foreign borrowing including international bonds). Banks meeting 100% on both LCR and NSFR are no longer bound by the cap but must keep reporting it.
. LDR ceiling under SBV Circular 50/2026/TT-NHNN (effective 1 Dec 2026) for banks applying LCR and NSFR: early adopters once approved, all banks from 1 Oct 2028. Commercial banks and foreign bank branches that apply LCR and NSFR. Basis date: 30 Sep 2026. Source: VietnamPlus (VNA): State Bank raises loan-to-deposit ratio cap to 95% (Circular 50/2026/TT-NHNN), October 2026
Minimum liquidity coverage ratio (LCR) from 1 Oct 2028: 50%. First-year LCR minimum under SBV Circular 50/2026/TT-NHNN. Commercial banks and foreign bank branches. Basis date: 30 Sep 2026. Source: Nhan Dan: Maximum loan-to-deposit ratio set at 95% (Circular 50/2026/TT-NHNN), 2026-10-02
Minimum LCR from 1 Oct 2033 (full phase-in): 100% (rising 10 points a year from 50% in 2028). Fully phased-in LCR minimum under SBV Circular 50/2026/TT-NHNN. Commercial banks and foreign bank branches. Basis date: 30 Sep 2026. Source: Nhan Dan: Maximum loan-to-deposit ratio set at 95% (Circular 50/2026/TT-NHNN), 2026-10-02
Minimum net stable funding ratio (NSFR) from 1 Oct 2028: 90%. First-year NSFR minimum under SBV Circular 50/2026/TT-NHNN. Commercial banks and foreign bank branches. Basis date: 30 Sep 2026. Source: Nhan Dan: Maximum loan-to-deposit ratio set at 95% (Circular 50/2026/TT-NHNN), 2026-10-02
Minimum NSFR from 1 Oct 2030 (full phase-in): 100% (after 95% from 1 Oct 2029). Fully phased-in NSFR minimum under SBV Circular 50/2026/TT-NHNN. Commercial banks and foreign bank branches. Basis date: 30 Sep 2026. Source: Nhan Dan: Maximum loan-to-deposit ratio set at 95% (Circular 50/2026/TT-NHNN), 2026-10-02
System credit growth, year to date: 8.38%. Growth of credit outstanding versus end-2025. Banking system. Basis date: 29 Jul 2026. Source: VietnamPlus: Vietnam to roll out 8.4 billion USD preferential loan scheme (2026-08-04)
System credit growth, year to date: 10.24%
Unverified; exact basis date not stated, report dated 17 September 2026.
. Growth of credit outstanding since end-2025, from SBV market report as reported. Banking system. Basis date: 17 Sep 2026. Source: Báo Nghệ An: Lãi suất ngân hàng ngày 17/9/2026 (2026-09-17)
System deposit (funding) growth, year to date: 8.77%
Unverified; as reported; basis date not stated.
. Growth of deposits/funding since end-2025. Banking system. Basis date: 17 Sep 2026. Source: Báo Nghệ An: Lãi suất ngân hàng ngày 17/9/2026 (2026-09-17)
System loan-to-deposit ratio, unadjusted (SSI Research estimate): around 112%
Raw ratio without the deductions and additions of the regulatory formula, so it is not comparable with the cap.
. SSI Research estimate of system credit to deposits, end-April 2026; not the regulatory LDR formula. Banking system. Basis date: 30 Apr 2026. Source: VietNamNet: Loan-to-deposit ratio hits 112% as credit demand stretches banking liquidity (2026-05-21, citing SSI Research)
Highest deposit rate, 6–12-month terms: 8%. Highest deposit rate offered for six- to 12-month terms, SBV data as reported by Viet Nam News. Banking system. Basis date: 31 Aug 2026. Source: Viet Nam News: Viet Nam rates likely to stay high until early 2027 (2026-09-30, citing SBV data)
Average lending rate (SBV data): 10.7% (nearly 2 percentage points above end-2025)
The report does not specify loan tenor, currency or whether the average covers new or outstanding loans.
. Average lending rate of credit institutions, State Bank of Vietnam data as reported by Viet Nam News. Banking system. Basis date: 31 Aug 2026. Source: Viet Nam News: Viet Nam rates likely to stay high until early 2027 (2026-09-30, citing SBV data)
SBV 2026 credit growth guideline: about 15%. Indicative full-year credit growth target set by the State Bank of Vietnam. Banking system. Basis date: 23 Sep 2026. Source: ADB: Developing Southeast Asia, Asian Development Outlook September 2026 (2026-09-23)

Sources

Reports are for information only and are not investment advice.