Circular 40/2026/TT-NHNN prescribing limits and prudential ratios for people's credit funds

CIRCULAR
Prescribing the limits and prudential ratios in the operations
 of people's credit funds

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12;

Pursuant to the Law on Credit Institutions No. 32/2024/QH15, as amended and supplemented by Law No. 96/2025/QH15;

Pursuant to the Law on Cooperatives No. 17/2023/QH15;

Pursuant to the Government's Decree No. 26/2025/ND-CP defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam, as amended and supplemented by Decree No. 198/2026/ND-CP;

At the proposal of the Director General of the Department of Credit Institution System Safety;

The Governor of the State Bank of Vietnam promulgates the Circular prescribing the limits and prudential ratios in the operations of people's credit funds.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular prescribes the restrictions, limits, and prudential ratios in the operations of people's credit funds, including:

a) Minimum capital adequacy ratio;

b) Solvency ratio;

c) Ratio of short-term funds used for medium and long-term loans;

d) Lending restrictions and limits;

dd) Ratio of total deposits to equity.

2. The handling of cases where the real value of the charter capital falls below the legal capital.

3. Based on the results of supervision, inspection, and examination of the people's credit fund, in necessary cases to ensure safety in the operations of the people's credit fund, depending on the nature and level of risk, the Regional branch of the State Bank where the people's credit fund's head office is located (hereinafter referred to as the Regional branch of the State Bank) shall require the people's credit fund to maintain one or more restrictions, limits, or prudential ratios stricter than the levels prescribed in this Circular.

4. People's credit funds under special control are not required to comply with the provisions of Articles 136, 137, 138, and Clause 3, Article 144 of the Law on Credit Institutions and the related provisions in this Circular.  

Article 2. Subjects of application

1. People's credit funds.

2. Organizations and individuals related to the operations of people's credit funds.

Article 3. Interpretation of terms

In this Circular, the following terms shall be construed as follows:

1. Customers include:

a) Members of the people's credit fund;

b) Legal entities and individuals who are not members but have deposits at the people's credit fund;

c) Members of poor households in accordance with the regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank) on people's credit funds.

2. Credit institutions and foreign bank branches mean credit institutions and foreign bank branches established and operating in Vietnam in accordance with the laws of Vietnam.

3. State-owned financial institutions mean institutions licensed for establishment and operation under the laws on insurance and securities in Vietnam, in which the State holds over 50% of the charter capital or the total voting shares.

Article 4. Information technology systems

The people's credit fund must have an information technology system to implement this Circular, ensuring the following minimum requirements:  

1. Storing, accessing, and supplementing the customer database, ensuring risk management in accordance with the regulations of the State Bank and the internal regulations of the people's credit fund.

2. Compiling statistics and monitoring items of capital, assets, and liabilities; calculating, managing, and supervising the restrictions, limits, and prudential ratios for operations specified in this Circular.

3. Ensuring the fulfilment of requests for information and reporting from the State Bank and the Regional branch of the State Bank.

Article 5. Internal regulations

1. The people's credit fund must have internal regulations on the management of the minimum capital adequacy ratio, liquidity management (solvency ratio, ratio of short-term funds used for medium and long-term loans, ratio of total deposits to equity), lending, and loan management in accordance with this Circular and relevant laws.

2. The internal regulation documents and the documents amending or supplementing the internal regulations specified in Clause 1 of this Article must be promulgated by the Board of Directors of the people's credit fund.  

3. The internal regulations on the management of the minimum capital adequacy ratio must include at least the following contents:

a) Regulations on the organizational structure, decentralization, authorization, functions, and duties of related individuals and departments in monitoring and implementing measures to ensure the maintenance of the minimum capital adequacy ratio;

b) Procedures and methods for monitoring the minimum capital adequacy ratio;

c) Early warning methods for risks that may reduce the capital adequacy ratio or violate the minimum capital adequacy ratio;

d) Handling plans when the capital adequacy ratio falls below the minimum level, which must include at least:

(i) Measures to increase the capital adequacy ratio;

(ii) Responsibilities, authorities, and coordination among departments and individuals in implementing the handling plan;

dd) Guidelines, inspection, control, and internal audit regarding the maintenance of the minimum capital adequacy ratio.

4. The internal regulations on liquidity management must include at least the following contents:

a) Regulations on the organizational structure, decentralization, authorization, functions, and duties of related individuals and departments in monitoring and implementing measures to ensure the maintenance of the solvency ratio, the ratio of short-term funds used for medium and long-term loans, and the ratio of total deposits to equity;

b) Procedures and methods for monitoring liquidity management limits to ensure the maintenance of the solvency ratio, the ratio of short-term funds used for medium and long-term loans, and the ratio of total deposits to equity;

c) Regulations on the daily management of the treasury, revenues, expenditures, and sources of funds;

d) Early warning methods for the risk of a shortfall in solvency and liquidity;

dd) Handling plans when the solvency ratio, the ratio of short-term funds used for medium and long-term loans, or the ratio of total deposits to equity violates the provisions of this Circular, which must include at least:

(i) Handling measures to ensure the solvency ratio, the ratio of short-term funds used for medium and long-term loans, and the ratio of total deposits to equity comply with this Circular;

(ii) Responsibilities, authorities, and coordination among departments and individuals in implementing the handling plan;

e) Solutions to maintain assets available for immediate payment;

g) Guidelines, inspection, control, and internal audit regarding the maintenance of the solvency ratio, the ratio of short-term funds used for medium and long-term loans, and the ratio of total deposits to equity.

5. The internal regulations on lending and loan management in accordance with this Circular and relevant documents must include at least the following contents:

a) Criteria for identifying customers and related persons of customers of the people's credit fund, including:

(i) Cases specified at Points b, c, dd, and g, Clause 24, Article 4 of the Law on Credit Institutions;

(ii) Individual customers and their spouses; biological parents, adoptive parents, stepfathers, stepmothers, parents-in-law; biological children, adopted children, stepchildren of spouses, daughters-in-law, sons-in-law; full siblings; paternal half-siblings; maternal half-siblings; brothers-in-law and sisters-in-law of the full siblings or half-siblings of that customer;

b) Lending restrictions and limits applicable to customers, as well as customers and their related persons; mechanisms and principles of decentralization and authorization for lending to customers, as well as customers and their related persons;

c) Maximum lending limits within the total outstanding loans for each category of customers: members, non-member customers, and customers who are members of poor households of the people's credit fund;

d) Procedures for the appraisal, approval, decision-making, and monitoring of loans exceeding 5% of the own capital and unsecured loans of the people's credit fund;

dd) Regulations on reporting to the Regional branch of the State Bank and the General Meeting of Members regarding loans to the subjects specified in Clause 1, Article 135 of the Law on Credit Institutions.

6. Periodically, at least once (01) a year and when necessary, the people's credit fund must review, re-evaluate, amend, and supplement its internal regulations to suit the requirements for ensuring safety in the operations of the people's credit fund.  

7. Within ten (10) days from the date of promulgation, amendment, supplementation, or replacement of internal regulation documents, the people's credit fund must submit the promulgated, amended, supplemented, or replaced internal regulations, along with a written report on the amended, supplemented, or replaced contents (if any), to the Regional branch of the State Bank.

Chapter II

SPECIFIC PROVISIONS

Article 6. Real value of charter capital

1. The real value of the charter capital of a people's credit fund shall be determined in accordance with the principles specified in Clause 2 and the calculation method specified in Clause 3 of this Article.

2. Principles for determining the real value of charter capital:

The people's credit fund shall determine the real value of its charter capital when it fully meets the following requirements:

a) Having fully set aside risk provisions in accordance with the law;

b) Having fully accounted for revenues and expenses in accordance with the law to determine business results.

3. Calculation method for the real value of charter capital:

The real value of charter capital shall be determined by the charter capital plus undistributed accumulated profits, minus uncovered accumulated losses reflected on the accounting books.

4. The people's credit fund must regularly monitor and evaluate the real value of its charter capital.

5. In cases where the real value of the charter capital at the reporting time does not include the adjusting entries of the independent audit (if any), the people's credit fund shall supplement such entries in the subsequent financial reporting period.  

Article 7. Handling when the real value of charter capital falls below the legal capital

1. When the real value of the charter capital of a people's credit fund falls below the legal capital, the people's credit fund must:

a) Formulate and implement a handling plan to ensure the real value of the charter capital is at least equal to the legal capital;

b) Within a maximum period of 30 days from the date the real value of the charter capital falls below the legal capital, submit a written report accompanied by the handling plan and a commitment to implement the handling plan directly or via postal service to the Regional branch of the State Bank, which must contain at least the following contents:

(i) The real value of the charter capital as prescribed in Article 6 of this Circular;

(ii) The causes for the real value of the charter capital falling below the legal capital;

(iii) Measures to ensure that the real value of the charter capital is not lower than the legal capital and to maintain restrictions, limits, and prudential ratios in operations;

c) Organize the implementation of handling measures upon the request of the Regional branch of the State Bank (if any).

2. Measures applied by the Regional branch of the State Bank to handle situations where the real value of the charter capital of a people's credit fund falls below the legal capital:

a) Evaluate, examine, inspect, or require the people's credit fund to conduct an independent audit to determine the real value of the charter capital stated in the handling plan reported by the people's credit fund as prescribed in Clause 1 of this Article;

b) Require the amendment, supplementation, and refinement of the handling measures of the people's credit fund when the real value of the charter capital is lower than the legal capital stated in the plan specified in Clause 1 of this Article in necessary cases;

c) Supervise, inspect, and examine the organization and implementation of the measures in the handling plan, including handling measures requested by the Regional branch of the State Bank;

d) Depending on the extent of the decrease in the real value of the charter capital compared to the legal capital, the Regional branch of the State Bank shall specifically decide on the following handling measures for the people's credit fund:

(i) Considering applying measures when the real value of the charter capital falls below 80% of the legal capital, including: Restricting dividend distribution; Restricting the expansion of the scope, scale, and geographical area of operations; Restricting, suspending, or temporarily suspending certain operational contents; Requiring the people's credit fund to increase its charter capital; Deciding on credit growth limits in necessary cases to ensure safety for the people's credit fund and the system of credit institutions; Applying one or more prudential ratios stricter than the prescribed levels;

(ii) Considering applying early intervention, special control, or restructuring in accordance with the law.

Article 8. Minimum capital adequacy ratio

1. The people's credit fund must maintain a minimum capital adequacy ratio of 8%.

2. The minimum capital adequacy ratio shall be determined by the following formula:

Where:

Own capital shall be determined in accordance with the Clause 3 of this Article;

Total risk-weighted assets shall be the total value of assets determined according to the risk levels specified in Clause 4 of this Article.  

3. Own capital shall comprise total Tier 1 capital and Tier 2 capital minus deductions from own capital at the time of determining own capital, specifically:

a) Tier 1 capital

Tier 1 capital shall include:

(i) Charter capital;

(ii) Capital for basic construction investment and purchases of fixed assets;

(iii) Reserve fund for supplementing charter capital;

(iv) Development investment fund;

(v) Financial reserve fund;

(vi) Non-refundable capital granted by organizations and individuals to the people's credit fund;

(vii) Undistributed accumulated profits;

Tier 1 capital must be deducted by the following items:

(i) Accumulated losses (if any);

(ii) Capital contributed to the cooperative bank;

b) Tier 2 capital shall be calculated up to a maximum of 100% of the value of Tier 1 capital, including: General provision, up to a maximum of 1.25% of total risk-weighted assets;

c) Deductions from own capital: 100% of the deficit resulting from asset revaluation in accordance with the law;

The specific determination of own capital to calculate the minimum capital adequacy ratio shall be specified in Appendix I promulgated together with this Circular.

4. Asset items shall be classified into groups according to risk levels as follows:

a) The group of assets with a 0% risk weight includes:

(i) Cash;

(ii) Deposits at the State Bank;

(iii) Deposits at the cooperative bank;

(iv) Outstanding loans fully secured by cash or deposits at the people's credit fund itself;

(v) Outstanding loans fully secured by valuable papers issued by the Government or the State Bank;

(vi) Capital contributed to the cooperative bank;

b) The group of assets with a 20% risk weight includes:

(i) Balances on payment accounts opened at commercial banks or foreign bank branches, excluding balances on payment accounts opened at commercial banks under special control;

(ii) Outstanding loans fully secured by valuable papers issued by State-owned financial institutions, credit institutions (excluding credit institutions under special control), and foreign bank branches;

c) The group of assets with a 50% risk weight includes: Outstanding loans fully secured by housing, land use rights, or housing attached to land use rights of the borrower in accordance with the law;

d) The group of assets with a 100% risk weight includes:

(i) Original cost of Fixed assets of the people's credit fund;

(ii) Other remaining asset items on the accounting balance sheet aside from the assets specified at Points a, b, c, and d(i) of this Clause;

The specific determination of the value of risk-weighted assets shall be specified in Appendix II promulgated together with this Circular.

Article 9. Solvency ratio

1. The solvency ratio shall be determined by the following formula:

Where: Assets available for immediate payment and payable liabilities shall be determined in accordance with the provisions in Appendix III promulgated together with this Circular.

2. At the end of a working day, the people's credit fund must maintain a solvency ratio for the next working day and a solvency ratio for the subsequent seven (7) working days of at least 100%.  

Article 10. Ratio of short-term funds used for medium and long-term loans

1. The people's credit fund must maintain a maximum ratio of short-term funds used for medium and long-term loans of 30%.

2. The ratio of short-term funds used for medium and long-term loans shall be determined by the following formula:

Where:

- A: ratio of short-term funds used for medium and long-term loans;

- B: total outstanding medium and long-term loans as prescribed in Clause 3 of this Article;

-C: total medium and long-term funds as prescribed in Clause 4 of this Article;

- D: short-term funds as prescribed in Clause 5 of this Article.  

3. Total outstanding medium and long-term loans include outstanding loans with a remaining term of over one (01) year. Total outstanding medium and long-term loans do not include outstanding loans entrusted by the Government, organizations (including credit institutions and foreign bank branches), and individuals.

4. Medium and long-term funds include:

a) Charter capital, reserve fund for supplementing charter capital, development investment fund, and financial reserve fund remaining after deducting accumulated losses (determined on the accounting balance sheet at the time of calculating the ratio of short-term funds used for medium and long-term loans), and the original cost of purchases and investments in fixed assets, and capital contributed to the cooperative bank in accordance with the law;

b) Undistributed accumulated profits (determined on the accounting balance sheet at the time of calculating the ratio of short-term funds used for medium and long-term loans);

c) The following items with a remaining term of over one (01) year, including:

(i) Term deposits and savings deposits of organizations and individuals;

(ii) Loans from credit institutions and foreign bank branches;

(iii) Loans from other organizations in accordance with the law.

5. Short-term funds include:

a) Demand deposits;

b) The following items with a remaining term of up to one (01) year:

(i) Term deposits and savings deposits of organizations and individuals;

(ii) Loans from credit institutions and foreign bank branches;

(iii) Loans from other organizations in accordance with the law.

6. In cases where the people's credit fund has total outstanding medium and long-term loans as prescribed in Clause 3 of this Article smaller than the total medium and long-term funds as prescribed in Clause 4 of this Article, when calculating the ratio of short-term funds used for medium and long-term loans, this ratio shall have a value of 0.

Article 11. Ratio of total deposits to equity

1. The people's credit fund must maintain a ratio of total deposits to equity not exceeding 20 times.  

2. The ratio of total deposits to equity shall be determined by the following formula:

Where:

- A: the ratio of total deposits to equity.

- B: total deposits specified in Clause 3 of this Article.

- C: equity specified in Clause 4 of this Article.

3. Total deposits shall be determined on the accounting balance sheet at the time of calculating the ratio of total deposits to equity, including the following items: demand deposits, term deposits, and savings deposits of members, organizations, and individuals in Vietnamese Dong.

4. Equity shall be determined on the accounting balance sheet at the time of calculating the ratio of total deposits to equity.

Article 12. Lending restrictions and limits

1. The people's credit fund shall base on its own capital determined in accordance with the Clause 3, Article 8 of this Circular at the end of the nearest working day to determine:

a) Lending restrictions for organizations and individuals in accordance with Article 135 of the Law on Credit Institutions;

b) Lending limits for a single customer, and a single customer and their related persons in accordance with Article 136 of the Law on Credit Institutions.

2. The Board of Directors shall approve loans to appraisers and loan approvers at the people's credit fund with a value of VND 100 million or more, or another lower value in accordance with the internal regulations of the people's credit fund. The remaining cases shall be implemented in accordance with Clause 3, Article 135 of the Law on Credit Institutions and the internal regulations of the people's credit fund.  

3. For loans to the subjects specified at Point a, Clause 1 of this Article, the people's credit fund must:

a) Report to the Regional branch of the State Bank in accordance with the regulations of the State Bank;

b) Disclose before the General Meeting of Members any loans incurred up to the data cut-off date for the General Meeting of Members.

4. The total amount of outstanding loans for a member that is a legal entity must not exceed the total contributed capital and deposit balance of that legal entity at the people's credit fund at any time.

5. The total amount of outstanding loans for non-member legal entity or individual customers must not exceed the balance of their deposit contracts or savings books at any time.

6. The limits specified at Point b, Clause 1 of this Article do not apply to:

a) Loans from the entrusted funds of organizations and individuals where the entrusted people's credit fund bears no risk;

b) Loans fully secured by deposits at the people's credit fund itself.

Article 13. People's credit fund losing solvency or facing the risk of losing solvency

1. A people's credit fund faces the risk of losing solvency when there is a shortfall of assets available for immediate payment of 20% or more at the time of calculating the solvency ratio compared to the minimum assets available for immediate payment required to comply with the solvency ratio prescribed in this Circular for 30 consecutive days.

2. A people's credit fund loses its solvency when it fails to pay its debt obligations within one (01) month from the due date for payment.

3. Upon losing solvency, facing the risk of losing solvency, or in cases where the people's credit fund self-assesses that it is insolvent, the people's credit fund must promptly report to the Regional branch of the State Bank and notify the cooperative bank branch of the current status, causes, applied measures, expected measures to be applied for remediation, and any proposals and recommendations to the Regional branch of the State Bank (if any).

Chapter III

RESPONSIBILITIES OF RELATED UNITS

Article 14. Responsibilities of the Regional branch of the State Bank

1. Deciding on the people's credit fund's maintenance of restrictions, limits, and prudential ratios as prescribed in Clause 3, Article 1 of this Circular.

2. Inspecting, examining, supervising, and implementing handling measures against violations committed by people's credit funds in their locality regarding the implementation of the provisions of this Circular, including handling measures for cases where the real value of the charter capital of a people's credit fund is lower than the legal capital as prescribed in Clause 2, Article 7 of this Circular.

3. Guiding people's credit funds in their locality in implementing the provisions of this Circular.  

4. Receiving the internal regulations of people's credit funds in accordance with the provisions of this Circular.  

Chapter IV

IMPLEMENTATION PROVISIONS

Article 15. Effect

1. This Circular takes effect from November 1, 2026.

2. This Circular annuls:

a) The Governor of the State Bank of Vietnam’s Circular No. 32/2015/TT-NHNN dated December 31, 2015 prescribing the limits and prudential ratios in the operations of people's credit funds;

b) The Governor of the State Bank of Vietnam’s Circular No. 13/2024/TT-NHNN dated June 28, 2024 of amending and supplementing a number of articles of the Governor of the State Bank of Vietnam’s Circular No. 32/2015/TT-NHNN dated December 31, 2015 prescribing the limits and prudential ratios in the operations of people's credit funds.

Article 16. Organization of implementation

Heads of units under the State Bank and people's credit funds shall be responsible for organizing the implementation of this Circular.

* All Appendices are not translated herein.