TL;DR: Circular 25 (Circular 25/2026/TT-NHNN) was signed by the State Bank of Vietnam (SBV) on 22 June 2026 and takes effect on 1 July 2026. It amends Circular 22/2019/TT-NHNN and does two things: it raises the cap on short-term funds used for medium and long-term lending from 30 per cent to 40 per cent, and it eases how State Treasury deposits are counted in the loan-to-deposit ratio (LDR). The aim is to give banks more room to lend, relieve funding pressure, and keep interest rates stable. State-owned lenders Vietcombank (VCB), BIDV (BID), and VietinBank (CTG) are seen as the biggest winners.
Table of Contents
- What is Circular 25/2026 and who issued it?
- What is the loan-to-deposit ratio, in plain English?
- What exactly does the new rule change?
- How does this compare with earlier liquidity rules?
- Why did the State Bank of Vietnam ease liquidity rules now?
- Which banks benefit most?
- What does it mean for investors?
- What should businesses and borrowers expect?
- What are the risks and limits?
- How does it reshape financial data needs?
- Frequently asked questions
- Sources
What is Circular 25/2026 and who issued it?
Circular 25 is short for Circular 25/2026/TT-NHNN, a banking regulation issued by the State Bank of Vietnam (SBV), the country central bank and banking regulator. The Governor of the SBV signed the document on 22 June 2026, and it becomes effective on 1 July 2026. The measure amends Circular 22/2019/TT-NHNN, the rule that sets prudential limits and safety ratios for banks and foreign bank branches operating in Vietnam.
In plain terms, the amendment under Circular 25 loosens two safety ratios that control how aggressively a bank can turn short-term deposits into longer-term loans. When it takes effect, the new rule also repeals two earlier texts, Circular 08/2020/TT-NHNN and Circular 08/2026/TT-NHNN, consolidating the treatment of these ratios into one updated framework. That makes Circular 25 the reference point banks will use for liquidity planning through the rest of 2026.
For readers new to the topic, the SBV publishes circulars (thong tu) to fine-tune how commercial banks manage risk. A circular is legally binding and sits below a law or a decree in the legal hierarchy. This one is therefore a technical, targeted adjustment rather than a sweeping new banking law, but its effect on lending capacity is meaningful for the whole sector.
The formal scope of the text is narrow. It changes specific numerical limits inside an existing framework rather than rewriting the framework itself. That is a deliberate design choice: the regulator wanted to add lending capacity quickly without reopening the entire prudential rulebook. Because the change is surgical, banks can implement it with minimal disruption to their existing risk models and reporting systems.
What is the loan-to-deposit ratio, in plain English?
The loan-to-deposit ratio (LDR) compares a bank total outstanding loans to its total deposits. A bank with 100 units of loans and 125 units of deposits has an LDR of 80 per cent. Regulators cap the LDR so that banks keep a cushion of deposits rather than lending out almost everything they take in. A lower LDR means more liquidity headroom; a higher LDR means the bank is lending more aggressively relative to its deposit base.
The second lever in the new rule works through the denominator of this ratio. By allowing banks to count a portion of State Treasury term deposits inside total deposits, the calculated LDR falls, which frees up lending room without any new customer deposits arriving. Understanding the LDR is the key to understanding why the change matters: it is a quiet accounting adjustment with a real-world lending effect.
What exactly does the new rule change?
Circular 25 contains two headline changes, both pointing in the same direction: freeing up lending capacity across the banking system.
1. A higher cap on short-term funding used for long-term loans
Circular 25 raises the maximum share of short-term funds a bank may use for medium and long-term lending from 30 per cent to 40 per cent. Vietnamese savers overwhelmingly hold short-term deposits, while borrowers, especially infrastructure and property developers, need multi-year loans. That mismatch had been tightly capped to limit maturity risk. By lifting the ceiling to 40 per cent, Circular 25 gives banks roughly a third more headroom to fund long-dated projects from their existing short-term deposit base.
2. Friendlier treatment of State Treasury deposits in the LDR
The second change in Circular 25 touches the loan-to-deposit ratio directly. The rule keeps counting 20 per cent of State Treasury term deposits inside the total-deposit figure and, importantly, lets the SBV Governor set a different percentage in future periods. Because a larger deposit base lowers the calculated LDR, this gives banks that hold Treasury money more measured lending room without breaching the ratio.
Taken together, the two levers work in the same direction: they expand the amount of credit banks can extend from the deposits they already hold. That is why analysts describe Circular 25 as a modest but meaningful loosening of liquidity rules rather than a dramatic policy pivot. The design keeps the prudential structure intact while turning up the dials the regulator already controls.
How does this compare with earlier liquidity rules?
The direction of travel is what makes Circular 25 notable. For years the SBV had gradually lowered the cap on short-term funds used for long-term lending, stepping it down toward 30 per cent to reduce maturity-mismatch risk after earlier periods of rapid credit growth. The new rule reverses that trend, lifting the ceiling back up to 40 per cent for the first time in years.
That reversal signals a shift in priorities. Where the earlier tightening emphasised stability and risk reduction, the 2026 change emphasises growth and capital supply. By repealing Circular 08/2020/TT-NHNN and Circular 08/2026/TT-NHNN, the regulator also tidied up a patchwork of overlapping provisions, so banks now work from one clear standard. The message to the market is that the central bank judges the system healthy enough to lend more.
Why did the State Bank of Vietnam ease liquidity rules now?
The timing of Circular 25 reflects two pressures. First, Vietnam needs a great deal of long-term capital for large infrastructure and Build-Transfer (BT) projects, and banks remain the primary source of that funding. Raising the short-term funding cap to 40 per cent directly supports that pipeline. Second, competition for deposits had been pushing funding costs up, and the SBV wants to keep interest rates stable to support economic growth.
By easing the ratios, Circular 25 reduces the urgency for banks to chase deposits at ever-higher rates. Local market commentary from Tin Nhanh Chung Khoan framed the move as adding room for banks and reducing interest-rate pressure. In other words, the change is as much about the price of money as it is about the quantity of lending, and both effects are meant to reinforce each other.
It is worth noting what the rule does not do. It does not change policy interest rates, and it does not remove the safety ratios entirely. It simply recalibrates the dials the SBV already uses, which is why the central bank can present Circular 25 as a supportive move that still keeps prudential guardrails firmly in place.
Which banks benefit most?
Not every bank gains equally from Circular 25. The lenders that benefit most are those that were already close to the old 30 per cent ceiling or that hold large State Treasury deposits. Vietnamese brokerages point to the three big state-owned commercial banks as the clearest winners: Vietcombank (VCB), BIDV (BID), and VietinBank (CTG). These banks hold sizeable Treasury balances, so both mechanisms in Circular 25 help them at once.
Beyond the state-owned trio, private banks that were running near the old short-term funding cap also gain fresh headroom. Analysts frequently name Military Commercial Joint Stock Bank (MBBank, MBB), Vietnam Prosperity Bank (VPBank, VPB), Techcombank (TCB), and Vietnam International Bank (VIB) as lenders positioned to expand credit as the new 40 per cent limit takes effect.
At a sector level, Vietnamese bank stocks were trading around 1.2 times forward 2026 price-to-book, below their historical average, while return on equity sat near 17 per cent, according to brokerage commentary compiled after the rule was issued. That combination of below-average valuation and a supportive change is why several securities firms turned more constructive on bank shares once the details of Circular 25 landed.
What does it mean for investors?
For equity investors, the change is a signal that the regulator wants credit to flow more freely into the economy in the second half of 2026. More lending headroom can translate into faster loan growth, which in turn supports net interest income at the banks best placed to use it. That is the core bull case Vietnamese brokerages built around Circular 25 once its terms were confirmed.
The read-through goes beyond banks. Property developers and construction firms that rely on medium and long-term bank credit stand to benefit indirectly, because the higher 40 per cent cap makes it easier for banks to fund their projects. Investors tracking Vietnam credit cycle should therefore watch this rule as one input among several, alongside credit-growth quotas and policy rates.
A word of discipline: a rule change is not a guarantee of higher profits. The impact will show up gradually in quarterly loan books and margins, not overnight. Investors who want to size the effect should track each bank actual short-term funding ratio and LDR over the coming quarters rather than trading on the headline alone. For a broader framing of how valuation lenses can mislead, see our explainer on market capitalisation as a metric in 2026.
What should businesses and borrowers expect?
For companies that borrow, the practical hope is easier access to longer-term loans and, over time, more stable rates. Infrastructure sponsors, manufacturers financing new plants, and property developers are the natural beneficiaries because their projects need multi-year funding that banks can now supply more readily under Circular 25. Small and medium enterprises may feel the effect indirectly as competition among banks for good borrowers picks up.
That said, borrowers should temper expectations. Analysts at 24H Money described the change as a gentle loosening of cash flow rather than a flood of cheap credit. Banks will still apply their own credit standards, and a stronger balance sheet, clean financials, and verifiable data will matter as much as ever when negotiating terms. The rule widens the door; it does not remove the lender judgement behind it.
What are the risks and limits?
A loosening always carries trade-offs. Letting banks fund more long-term loans from short-term deposits raises maturity-mismatch risk, the same risk the old 30 per cent cap was designed to contain. If deposits were to leave the system quickly, banks operating near the new 40 per cent limit under Circular 25 would face tighter liquidity than before, which is precisely the scenario the earlier tightening tried to avoid.
Local analysis from 24H Money cautioned that the measure only nudges cash flow rather than opening the floodgates, so sectors hoping for a large credit boost, such as property and construction, may see a more modest lift than the headlines suggest. In that reading, the rule improves the supply of capital at the margin but does not by itself resolve weak demand or project-level risk.
There is also execution risk. Because the text lets the SBV Governor adjust the Treasury-deposit percentage in future periods, the exact benefit can change over time. Banks and investors will need to monitor SBV guidance rather than assume the initial settings are permanent. In short, Circular 25 is supportive, but it is a calibrated tool the regulator can retune whenever conditions shift.
How does it reshape financial data needs?
Rules like this turn on numbers that change every quarter: each bank short-term funding ratio, its LDR, its Treasury deposit balance, and its loan mix by maturity. To judge who really benefits from Circular 25, analysts need clean, timely, standardised data on all of these across every listed bank, not just headline commentary from the day the rule was announced.
This is where structured financial data matters. DataCore Company Intelligence Service pulls together standardised company and financial data on Vietnamese listed firms, so analysts can track how banks respond over time. Pairing that with disciplined vendor practices, as covered in our guide on what to ask your Vietnam financial data vendor about security, helps teams build a reliable, auditable view of the new landscape.
The wider context also matters. Vietnam is deepening its capital markets, from its FTSE emerging-market upgrade to new market infrastructure such as the national carbon exchange and government support like the technology loan subsidy programme. This liquidity change fits into that broader push to channel more capital, more efficiently, into the real economy, and each step raises the premium on trustworthy financial data.
Frequently asked questions
When does Circular 25/2026 take effect?
It was signed on 22 June 2026 by the State Bank of Vietnam and takes effect on 1 July 2026. From that date, the higher 40 per cent short-term funding cap and the updated LDR treatment apply to banks in Vietnam.
What is the main change in Circular 25?
The headline change is raising the cap on short-term funds used for medium and long-term lending from 30 per cent to 40 per cent, alongside a friendlier treatment of State Treasury deposits in the loan-to-deposit ratio.
Which banks benefit most?
State-owned banks Vietcombank (VCB), BIDV (BID), and VietinBank (CTG) are seen as the biggest winners because they hold large Treasury deposits. Private banks near the old cap, such as MBBank, VPBank, Techcombank, and VIB, also gain lending room.
Does the rule change interest rates?
No. It does not change policy interest rates directly. By easing liquidity ratios, it is intended to reduce upward pressure on deposit and lending rates, but the SBV sets policy rates through separate decisions.
What did Circular 25 replace?
It amends Circular 22/2019/TT-NHNN and repeals Circular 08/2020/TT-NHNN and Circular 08/2026/TT-NHNN, consolidating the treatment of these safety ratios into a single updated rule.
Is this a permanent change?
The 40 per cent cap is set in the rule, but the SBV Governor can adjust the Treasury-deposit percentage in future periods. Banks and investors should watch for further SBV guidance rather than assume every parameter is fixed forever.
Bottom line: Circular 25 is a targeted, pro-growth adjustment to Vietnam bank liquidity rules. It will not transform the sector overnight, but it tilts the playing field toward lenders with strong deposit franchises and Treasury relationships. For investors and analysts, the practical task now is to measure the effect bank by bank, quarter by quarter, using reliable financial data rather than headlines.
Sources
- The Investor: "Vietnam raises cap on short-term funding for medium- and long-term lending to 40%", June 2026: theinvestor.vn
- The Saigon Times: "Vietnam raises short-term funding ratio for medium-, long-term lending to 40%", June 2026: english.thesaigontimes.vn
- Vietnam Government Gazette (Cong bao Chinh phu): full text of Circular 25/2026/TT-NHNN: congbao.chinhphu.vn
- Tin Nhanh Chung Khoan: "Circular 25: more room for banks, less rate pressure", June 2026: tinnhanhchungkhoan.vn
- CafeF: "Many stocks benefit from the new banking rule", June 2026: cafef.vn
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