HANOI: The State Bank of Vietnam (SBV) has proposed allowing banks to extend credit beyond normal regulatory limits for major projects in Hanoi to facilitate funding for large infrastructure developments in the capital city, while also ensuring the stability of the banking system.
The proposal is part of several amendments to Decision 09/2024/QD-TTg, which regulates the conditions, documentation and procedures for approving credit exposure that exceeds standard thresholds for credit institutions and foreign bank branches.
Under the draft, projects defined as large and important in the capital city as detailed under the National Assembly’s Resolution 258/2025/QH15 would be added to an eligibility list for loans beyond standard lending caps.
Specifically, the maximum credit exposure for a single borrower would not exceed 38% of a bank’s owned capital, while lending to a borrower and related parties would be capped at 52% of bank capital when financing large projects in the city.
The central bank also proposed limiting the total value of loans granted beyond normal limits by a bank to no more than four times its owned capital, including both approved loans and those under consideration.
The SBV said the thresholds were proposed based on financing projects requiring large capital, including the Son La and Lai Chau hydropower plants and several thermal power projects, and most recently Quang Trach 1.
At Quang Trach 1, Prime Minister Pham Minh Chinh approved lending beyond standard limits for Vietnam Electricity (EVN), at 38% of a bank’s owned capital for a single borrower and 52% for EVN and related parties.
In comparison, the lending cap in 2025 was 13% of a bank’s owned capital for a single borrower and 21% for a borrower and related parties, which would decline to 10% and 15% respectively by 2029, under the Law on Credit Institutions 2024.
The SBV said that setting clear ceilings would create a legal framework for financing large projects while helping control credit concentration risks within the banking system.
Given the large financing needs of infrastructure and energy projects, the SBV said banks could also arrange syndicated loans, allowing multiple lenders to jointly finance a project and share risks.
With the current capital levels of major banks, the proposed ratios could allow very large loans of up to trillions of Vietnamese dong.
By the end of last year, Vietcombank and VietinBank reported owned capital of more than 222.7 trillion dong and nearly 229.2 trillion dong, respectively.
At those levels, the proposed caps would allow lending of around 87 trillion dong to a single borrower and about 119 trillion dong to a borrower and related parties.
The SBV noted that some major projects planned in Hanoi are estimated to require a total investment of about 300 trillion dong, with borrowing needs accounting for roughly 85%, or 255 trillion dong.
The central bank said that higher lending caps and syndicated loans could enable the banking sector to mobilise sufficient capital for strategic infrastructure projects in the capital city. — Viet Nam News/ANN
