Headlines 26/08/2020 08:19 SA

New regulation on maximum short-term asset ratio for long-term lending is about to take effect

Thùy Liên

The Circular No. 08/2020/TT-NHNN dated August 14, 2020, amending and supplementing the Circular No. 22/2019/TT-NHNN prescribing prudential limits and ratios for operations of banks and foreign bank branches.

According to the Circular, banks and foreign bank branches must meet maximum ratios of short-term assets used for grant of mid-term and long-term loans according to the following new schedule:

- From January 1, 2020 to end of September 30, 2021: 40%.

 (Circular No. 22 prescribes that the maximum short-term asset ratio to be applied from January 1, 2020 to end of September 30, 2020, and from October 1, 2020 to end of September 30, 2021, must be 40% and 37%, respectively).

- From October 1, 2021 to end of September 30, 2022: 37%;

 (Circular No. 22 prescribes that the maximum short-term asset ratio to be applied from October 1, 2021 to end of September 30, 2022 must be 34%).

- From October 1, 2022 to end of September 30, 2023: 34%;

 (Circular No. 22 prescribes that the maximum short-term asset ratio to be applied from October 1, 2022 must be 30%).

- From October 1, 2023: 30%.

The Circular No. 08/2020/TT-NHNN is entering into force on October 1, 2020.

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