VDB MUST MAINTAIN THE LIQUIDITY RESERVE RATIO OF AT LEAST 0.6%
On June 30, 2022, the State Bank of Vietnam promulgates the Circular No. 07/2022/TT-NHNN amending and supplementing a number of articles of the Circular No. 07/2019/TT-NHNN dated July 03, 2019 of the Governor of the State Bank of Vietnam on prescribing limits and prudential ratios in operations of the Vietnam Development Bank (VDB).
According to the Circular, the total outstanding balance of loans includes: short-term outstanding balance of loans supporting export; short-term outstanding balance of loans for special projects of the Government; intermediate-term outstanding balance of investment credit; Intermediate-term outstanding balance of loans for special projects of the Government; long-term outstanding balance of investment credit; long-term outstanding balance of loans for special projects of the Government; outstanding balance of loans required to be guaranteed; other outstanding balance of loans; and outstanding balance of pending loans.
The equity used for lending shall be the equity of VDB in accordance with the Government’s regulations, except for the residual value of fixed assets and actual construction-in-progress expenses, but not exceeding 25% of the charter capital and reserve fund for addition of charter capital of VDB; the charter capital used for contributing to the charter capital of Vietnam Infrastructure Development and Finance Investment Joint Stock Company; and the financial provision fund.
Remarkably, VDB shall maintain the ratio of the outstanding balance of loans to the total capital used for lending of 95% at the maximum and the liquidity reserve ratio of at least 0.6%.
This Circular takes effect on August 15, 2022.
