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Vietnam’s central bank proposes early intervention for struggling credit firms

The State Bank of Vietnam (SBV) is planning to introduce legislation permitting early intervention measures for struggling credit institutions, according to a draft revised Law on Credit Institutions. The measures, including no-collateral loans at zero percent interest, would apply to credit institutions that fail to maintain their solvency ratio or capital adequacy ratio, or when accumulated losses exceed 20% of their charter capital value and reserve funds. The move is intended to mitigate significant risks and prevent further damage to the banking system and the broader economy. Critics have emphasised the need for swift action, legal mechanisms, and sufficient authority for the SBV to handle such situations effectively.


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