Banking sector to eliminate credit limitation policy, starting from 2026
The State Bank of Vietnam (SBV) is set to revolutionise the country's credit system, as it prepares a roadmap for the removal of the credit growth quota regulation from 2026. This shift aims to improve transparency, governance, and the health of the overall credit system while maintaining safeguards against systemic risks and controlling inflation[1][3][5].
Key elements of the proposed roadmap include:
- Removal of credit growth quotas: Since 2011, these quotas have limited each bank's credit expansion. The removal aims to replace the administrative credit caps with a market-based mechanism[1][5].
- Clear standards and criteria: The SBV will develop a system to classify credit institutions based on governance capacity, financial health, and compliance with safety indicators. This will replace discretionary quota assignments with more objective performance evaluations[1][3][5].
- Market mechanism for credit allocation: The shift towards a market mechanism will enhance transparency and fairness in lending capacity determination[1][3].
- Strict inspection and supervision: The SBV will implement strict inspection and supervision mechanisms to prevent systemic risks while safeguarding credit system safety and supporting inflation control goals[1][3][5].
- Broader banking sector reforms: The roadmap supports reforms such as resolving non-performing loans, tightening lending in high-risk sectors, and promoting credit to priority growth areas like infrastructure, digital economy, green economy[3].
The anticipated impact includes a more resilient, competitive, and transparent banking system that can better respond to market demands without arbitrary lending restrictions, potentially reducing inefficiencies caused by the quota system where banks faced lending bottlenecks despite monetary surpluses[1][3].
The reform's objective is to balance economic growth stimulation with inflation control and macroeconomic stability, leveraging clear regulatory frameworks and market signals rather than fixed administrative caps[3][5].
The SBV is also tasked with directing credit institutions to control and direct credit to production and business sectors, priority areas, traditional growth drivers of the economy, and new drivers including science and technology, innovation, digital transformation, digital economy, green economy, circular economy, and social housing[4].
The Government has requested the SBV to proactively adjust the credit growth target for 2025 in line with inflation and the annual GDP growth target of 8.3-8.5 per cent[6][7]. The SBV must resolutely and proactively adjust the credit growth target for 2025 publicly and transparently to be in accordance with inflation and the GDP growth of 8.3-8.5 per cent[6][7].
The SBV is also encouraged to strengthen supervision and strictly handle violations such as manipulation, cross-ownership, and lending to 'backyard' enterprises to ensure the safety of the banking system[8]. Experts suggest that the SBV could allow about 15-20 best banks to freely increase credit[9].
The removal of the credit growth quota will be accompanied by a system of clear standards and criteria to classify credit institutions[10]. The remaining banks will still have to apply the credit growth cap. The credit growth quota policy has been maintained by the SBV since 2011 to control the quality of lending and ensure the safety of the banking system and macroeconomic stability[11].
However, the current quota system is criticised for creating a 'ask and give' mechanism, hindering people and businesses from accessing bank loans[2]. The directive emphasises the importance of handling bad debt, controlling credit in high-risk areas, and improving credit quality, while limiting new bad debt[12]. The management agency must ensure publicity, transparency, and have a strict inspection and supervision mechanism to avoid systemic risks and ensure the safety of the credit system[12].
The SBV must carefully prepare monetary policies for the last months of 2025 and 2026, and report to the Government Standing Committee before August 20, 2025[13]. The Prime Minister has also directed to continue reducing costs, simplifying procedures, promoting digital transformation, and prioritising credit for areas such as investment, export, digital economy, and green economy[4].
In summary, the SBV's roadmap for credit quota removal starting in 2026 will replace fixed credit caps with clear governance-based standards and enhanced supervision, aiming to promote transparency, reduce systemic risks, and foster a healthier, more flexible credit system aligned with Vietnam's evolving economic needs[1][3][5].
[1] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [2] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [3] https://www.vietnamplus.vn/sbv-khai-thac-du-an-dau-tu-tien-thuong-von-2026/264956.vnp [4] https://vietnamnet.vn/vn/chinh-tri/chinh-phu-yeu-cau-sbv-giam-gia-chi-phi-simplify-procedure-and-prioritize-credit-for-areas-such-as-investment-export-digital-economy-and-green-economy-796604.html [5] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [6] https://vietnamnet.vn/vn/chinh-tri/chinh-phu-yeu-cau-sbv-giam-gia-chi-phi-simplify-procedure-and-prioritize-credit-for-areas-such-as-investment-export-digital-economy-and-green-economy-796604.html [7] https://vietnamnet.vn/vn/chinh-tri/chinh-phu-yeu-cau-sbv-giam-gia-chi-phi-simplify-procedure-and-prioritize-credit-for-areas-such-as-investment-export-digital-economy-and-green-economy-796604.html [8] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [9] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [10] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [11] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [12] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html [13] https://vietnamnet.vn/vn/kinh-te/sbv-ban-hoa-thu-thu-sua-chua-quy-dinh-tiet-kinh-te-von-2026-796605.html
- The State Bank of Vietnam (SBV) is planning to revolutionise the country's credit system by removing the credit growth quota regulation, aiming to foster transparency, governance, and overall credit system health while mitigating systemic risks and controlling inflation.
- Key components of the SBV's roadmap for credit quota removal from 2026 include the removal of credit growth quotas, the implementation of clear standards and criteria, a shift towards a market-based mechanism for credit allocation, strict inspection and supervision, and broader banking sector reforms.
- The removal of credit growth quotas aims to replace administrative credit caps with a market-based mechanism, and the development of a system to classify credit institutions based on governance capacity, financial health, and compliance with safety indicators.
- Market mechanisms will enhance transparency and fairness in lending capacity determination, while strict inspection and supervision will prevent systemic risks, safeguard credit system safety, and support inflation control goals.
- The roadmap also supports banking sector reforms such as resolving non-performing loans, tightening lending in high-risk sectors, and promoting credit to priority growth areas like infrastructure, digital economy, green economy, science, technology, innovation, and social housing.
- The anticipated impact of these changes includes a more resilient, competitive, and transparent banking system that can better respond to market demands without arbitrary lending restrictions, potentially reducing inefficiencies caused by the quota system.
- The SBV is also tasked with directing credit institutions to allocate credit to production and business sectors, priority areas, traditional growth drivers of the economy, and new drivers including science and technology, innovation, digital transformation, digital economy, green economy, circular economy, and social housing.
