Proposed Procedure for Granting Credit Exceeding the Limit for a Major Project in Hanoi
The State Bank of Vietnam (SBV) is drafting a circular stipulating the conditions, documentation, and procedures for requesting approval of maximum credit limits exceeding the established limits for large, important projects in the capital. According to the draft, the maximum proposed credit limit for a single customer shall not exceed 38% of the bank’s equity capital; for a single customer and related parties, it shall not exceed 52% of the bank’s equity capital.
The draft circular was developed to provide guidance on the implementation of Clause 2, Article 8 of National Assembly Resolution No. 258/2025/QH15 on piloting certain special mechanisms and policies to implement large and important projects in the capital. The scope of regulation covers the conditions, documentation, and procedures for requesting the Governor of the State Bank of Vietnam to review and approve the maximum credit limit exceeding the limits of a commercial bank or a foreign bank branch for a single customer or a customer and related parties.
The scope of application includes commercial banks and foreign bank branches; borrowers; and related organizations and individuals.
One of the notable provisions of the draft is the specific stipulation of conditions for considering and approving credit facilities exceeding the limit. Accordingly, customers must have a need for loans to invest in large, important projects within the capital city that have been approved by competent authorities in accordance with Resolution No. 258/2025/QH15, and must also meet the relevant conditions set forth in Decision No. 09/2024/QĐ-TTg and its amendments and supplements.
As for commercial banks and foreign bank branches, in addition to meeting the conditions under Decision No. 09/2024/QĐ-TTg, the draft stipulates that the maximum proposed credit limit for a single customer may not exceed 38 percent of the commercial bank’s or foreign bank branch’s equity capital. In cases involving a customer and their related parties, the maximum limit may not exceed 52 percent of equity capital. These credit facilities must be used to finance large, important projects in the capital region that have been approved by the competent authorities.
Thus, the 38% and 52% thresholds in the draft represent the maximum credit limits that may be proposed; they are not automatically applied to all loans. Credit extensions exceeding these limits must also meet specific conditions and undergo the required review and approval procedures as stipulated.
The dossier submitted to the State Bank of Vietnam must include a written request from the bank asking the Governor of the State Bank of Vietnam to authorize credit exceeding the limit; documents and materials proving that the bank meets the conditions; documents in accordance with Decision No. 09/2024/QĐ-TTg; legal documents related to the project; and a report on the status of credit relationships and the need for credit beyond the limit.
Regarding the project’s legal documents, the draft requires an investment registration certificate or a document approving or authorizing the project issued by the competent authority. For projects falling under the case specified in Point a, Clause 2, Article 1 of Resolution No. 258/2025/QH15, the documentation must also include a document from the Politburo, the Central Party Secretariat, the Government Party Committee, or the Hanoi City Party Committee Executive Committee, containing instructions to immediately implement the project.
The draft also sets out relatively specific procedures for processing applications. Commercial banks and branches of foreign banks shall submit one set of documents to the State Bank of Vietnam directly at the One-Stop Service Center or via postal service. Within 5 working days of receiving a complete set of documents, if the bank does not meet the conditions, the State Bank of Vietnam shall issue a written notice clearly stating the conditions that have not been met. If the application is valid, the State Bank of Vietnam will seek input from relevant ministries, agencies, and local authorities regarding the economic, technical, and legal aspects of the project, the proposed plan, and the client.
Ministries, agencies, and local authorities have five working days from the date of receipt of the State Bank of Vietnam’s document to submit written comments on matters within their jurisdiction. Based on these comments, the State Bank of Vietnam may request banks, foreign bank branches, and customers to provide explanations regarding any related issues, if any.
Subsequently, within 17 working days from the date of receiving the comments from the ministries, agencies, and local authorities or the explanatory statements, the State Bank of Vietnam reviews the reasonableness and validity of the application. If the application does not meet the conditions, the State Bank of Vietnam shall notify the applicant in writing and specify the conditions that have not been met. If the application is reasonable and valid, the Governor of the State Bank of Vietnam shall decide on the approval of credit exceeding the limit.
In addition to the review procedure, the draft establishes responsibilities for banks after the credit facility exceeding the limit has been approved. Banks may only use the maximum approved credit limit for each specific project and are responsible for the accuracy and completeness of the information and documents provided to the State Bank of Vietnam. The bank is also responsible for appraising, granting loans, inspecting, and monitoring the use of funds and debt repayment, as well as recovering principal and interest and managing risks should they arise.
Notably, the bank must conduct strict monitoring and supervision to ensure that customers use the loan proceeds for their intended purposes and must report monthly to the State Bank of Vietnam on the status of the credit facility exceeding the limit that has been approved by the competent authority. According to the guidelines in the forms attached to the draft, reports must be submitted no later than the 12th day of the month following the reporting month.
The draft also designates the Credit Department as the focal point for receiving documentation, coordinating with relevant units to advise the Governor of the State Bank of Vietnam on reviewing, deciding, and monitoring the implementation of credit facilities exceeding the limit that remain in effect. The State Bank of Vietnam’s Inspectorate and relevant units shall conduct inspections and supervision in accordance with their assigned functions.
One aspect related to the capital arrangement process is the publication of a syndicated loan invitation letter. According to the draft, within three working days of receiving a request, the State Bank of Vietnam’s Office shall publish the syndicated loan invitation letter on the State Bank of Vietnam’s electronic portal, while the Banking Times shall publish it in the unit’s electronic publications. These entities are also responsible for providing their opinion on whether the bank has met the requirement to publish the capital contribution invitation for at least 30 days, as stipulated.
According to the draft, the Circular will take effect as of the date specified in the official document and will remain in effect until Resolution No. 258/2025/QH15 expires. For customers, if a project has been approved for a maximum credit limit exceeding the limit prior to the effective date of the Resolution, implementation shall continue in accordance with the previously issued approval document for credit exceeding the limit.