Prudent Ratios for Small-Sized Finance Institutions Announced
The State Bank of Vietnam, the country’s central bank, has recently issued a regulation small-sized finance institutions maintain capital adequacy ratio equivalent to 10 per cent of their own capital over the total risky assets.
The circular stipulated prudent ratios applicable to small-sized finance institutions in Vietnam, including capital adequacy ratio, lending cap for a single borrower, and the solvency ratio.
Total outstanding loans of a small-sized finance institution for a non small-sized financial customers will not allowed to exceed 10 per cent of its own capital while that for another small-sized customers will be less than VND30 million.
For the solvency ratio, the SBV asks the small-sized finance institutions should constantly maintain the minimum ratio at 20 per cent.
Small-sized finance institutions will be asked to maintain higher prudent ratios than stipulated in line with the oversight outcome of their practical performance.
The Circular will take effect after 45 days from the signing date. (SBV)
Vietnamese
