The Circular No. 16/2018/TT-NHNN amending the Circular No. 36/2014/TT-NHNNissued on July 31, 2018, prescribes prudential limits and ratios for operations of credit institutions and foreign bank branches.

According to the Circular, credit institutions and foreign bank branches must abide by the maximum percentage of short-term fund used for extension of mid-term and long-term loans according to the following schedule:

– From January 1, 2018 to end of December 31, 2018:

+ Banks and foreign bank branches: 45%;

+ Non-bank credit institutions: 90%.

– From January 1, 2019:

+ Banks and foreign bank branches: 40%;

+ Non-bank credit institutions: 90%.

In addition, the Circular provides regulations on the formula for calculating the ratio of outstanding loan debts to total mobilized deposit.

For more details, please see the Circular No.16/2018/TT-NHNN (entering in force on July 31, 2018).

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