The State Bank of Vietnam issued Circular 50 setting new prudential ratios for commercial banks and foreign bank branches. The measure takes effect on 1 December 2026 and raises the maximum loan-to-deposit ratio to 95% from 85%. It also introduces phased liquidity coverage ratio and net stable funding ratio requirements from 1 October 2028. The transition reaches a 100% LCR in 2033 and a 100% NSFR in 2030.
The LCR will begin at 50% and rise by 10 percentage points each year until reaching 100% on 1 October 2033. The NSFR will start at 90%, increase to 95% a year later and reach 100% on 1 October 2030. A bank maintaining both ratios at 100% will not have to comply with the 95% LDR limit, although it must continue calculating and reporting LDR. Banks may seek early adoption if they meet the specified evidence requirements.
LIQUIDITY STANDARDS MOVE TOWARDS BASEL III
The two new ratios address different parts of liquidity risk. LCR measures whether a bank holds enough high-quality liquid assets to withstand a short-term stress period, while NSFR tests whether longer-term assets are supported by sufficiently stable funding. Their staggered implementation gives banks time to adjust funding profiles and reporting systems.
Early adopters must submit an assessment from their board or senior management and an evaluation by an independent auditor. The supporting reports must confirm compliance with both ratios at each month-end for three consecutive months before registration. This creates an evidence threshold before a bank can move away from the standard LDR constraint.
LDR CALCULATION ALSO CHANGES
Circular 50 revises both sides of the LDR calculation. Eligible funding will include certain domestic subordinated bonds, entrusted capital, foreign borrowings and shareholder funds, while several deposits and credit exposures are excluded or deducted. The changes mean the new 95% ceiling is not directly comparable with the previous 85% limit.
Banks will next need to assess whether their balance sheets and systems can meet the 2028 liquidity timetable or support earlier adoption. The first concrete milestone is the circular’s entry into force on 1 December 2026. Subsequent registrations and regulatory reporting will indicate how quickly larger lenders move towards full Basel III liquidity standards.