The State Bank of Vietnam (SBV
), the country’s central bank, could lower the required reserve ratio (RRR) for banks that are involved in the ongoing overhaul of the banking system.
According to Circular 23/2015, the SBV will consider cutting the RRR on a case-by-case basis for banks that carry out restructuring plans or participate in the revamp of weak credit institutions.
Circular 23 will enter into force on January 28, 2016.
Under the current legislation, the SBV can slash the RRR to zero for banks that are being put under special control. RRRs have been unchanged over the past few years.
The RRR for less-than-12-month deposits in the Vietnamese dong is currently set at 3%, and for longer-than-12-month deposits at 1%. The respective rates for deposits in foreign currencies are 8% and 6%.
The RRR applied for state-run Agribank and some special credit institutions is lower.
The SBV has sped up the banking restructuring since 2013, leading to a number of mergers and takeovers. The notable mergers include BIDV
-MHB, Maritime Bank-MDB, Sacombank-SouthernBank, PV Financial Corp-WesternBank. This year, the SBV has taken over three weak banks namely Vietnam Construction Bank, OceanBank
Credit growth of the whole banking system is forecast to bear the 17% target set by the SBV, after having hit 14.5%-15% between January and November, helping boost the country’s GDP expansion at 6.5% in the first three quarters.