From October 1st, the mandatory reserve ratio will be reduced by 50%.

According to new regulations from the State Bank of Vietnam, from October 1st, some banks are allowed to reduce their mandatory reserve ratio by 50%. With this new regulation, four major banks will be able to reduce their cost of capital, freeing up more than 50,000 billion VND to expand lending.

The State Bank of Vietnam has just issued Circular 23/2025/TT-NHNN (dated August 12, 2025) amending and supplementing Circular 30/2019/TT-NHNN dated December 27, 2019, regulating the implementation of mandatory reserves for credit institutions and branches of foreign banks (Circular 23).

The new regulations are expected to bring significant benefits, especially to large banks that are actively participating in the restructuring of weak credit institutions.

Reducing the reserve requirement ratio by 50% will give banks more capital to lend. (Illustrative image)

Currently, the mandatory reserve ratio applied to VND deposits with maturities of less than 12 months is 3%; for deposits of 12 months or more, it is 1%. For foreign currency deposits, the ratio is higher, at 8% and 6% for maturities of less than 12 months and 12 months or more, respectively.

With the new changes in Circular 23, in some special cases such as commercial banks receiving the mandatory transfer of weak credit institutions, the mandatory reserve ratio is preferentially reduced by 50%, to only 1.5% and 0.5% for VND deposits.

According to experts, reducing the reserve requirement ratio helps improve the cost of capital for banks, thereby allowing a larger amount of new money to be injected into the market.

In fact, mandatory reserves are the portion of capital that commercial banks must deposit with the State Bank of Vietnam when they raise funds from customers, with varying rates depending on the term.

The shorter the term of the mobilized capital, the higher the reserve ratio, aiming to limit banks from using short-term capital for medium- and long-term lending and avoiding maturity risk. Thus, mandatory reserves are considered a "buffer" protecting the system.

According to the latest reports from commercial banks, outstanding credit at Vietnam Foreign Trade Commercial Bank (Vietcombank) increased by VND 106.3 trillion; Vietnam Prosperity Commercial Bank increased by VND 132.2 trillion; Military Commercial Bank (MB) increased by VND 99.8 trillion; Ho Chi Minh City Development Commercial Bank increased by VND 68.7 trillion at HDBank …

According to the new regulations, banks are allowed a 50% reduction in mandatory reserves. It is estimated that Vietcombank will see the largest reduction, approximately 23,850 billion VND. This will be followed by MB with a reduction of around 11,700 billion VND; VPBank with a reduction of approximately 9,200 billion VND; and HDBank with nearly 7,200 billion VND. Considering only these banks, the reduction in mandatory reserves will free up over 50 trillion VND.

If 50 trillion VND is absorbed by the economy , not only will banks be able to increase their liquidity, but many businesses will have better access to capital, creating favorable conditions for business growth.

To date, four mandatory transfer deals have taken place: Vietcombank acquiring CBBank (Vietnam Construction Bank), MB acquiring OceanBank (Ocean Bank, later renamed Vietnam Modern Bank), VPBank acquiring GPBank (Global Petroleum Bank), and HDBank acquiring DongABank (Dong A Bank).

Source: https://hanoimoi.vn/tu-ngay-1-10-giam-50-ty-le-du-tru-bat-buoc-4-ngan-hang-lon-co-the-giai-phong-hon-50-000-ty-dong-713295.html