Major changes of Circular No. 23/2025/TT-NHNN on required reserves

The State Bank of Vietnam has issued a Circular amending and supplementing regulations on required reserves applicable to credit institutions and foreign bank branches. Below are the major changes introduced by Circular No. 23/2025/TT-NHNN regarding banks’ required reserves.

1. Addition of a bank not required to maintain required reserves

Previously, Article 3 of Circular No. 30/2019/TT-NHNN provided for credit institutions that were not required to maintain required reserves. Under Article 1 of Circular No. 23/2025/TT-NHNN, one additional bank has been added to this list, namely the Policy Bank.

Accordingly, from October 01, 2025, credit institutions not required to maintain required reserves include:

• Banks placed under special control: The period during which required reserves are not required starts from the month following the month in which the bank is placed under special control by the State Bank of Vietnam and ends in the month when special control is terminated.
• Banks that have not yet commenced operations: The period during which required reserves are not required lasts until the end of the month in which the bank officially commences operations; the bank must notify the State Bank of Vietnam (the Central Banking Department) in writing of the commencement date within three working days from such date.
• Banks approved for dissolution, subject to a decision on initiation of bankruptcy procedures, or subject to a decision on revocation of licenses by a competent authority: The period during which required reserves are not required starts from the month following the month in which the approval for dissolution, the decision on initiation of bankruptcy procedures, or the license revocation takes effect.

2. Addition of a case of 50% reduction of the required reserve ratio

A major change introduced by Circular No. 23/2025/TT-NHNN is provided in Article 2 thereof. Accordingly, a credit institution being the mandatory transferee of a commercial bank placed under special control is entitled to a 50%-reduction of the required reserve ratio.

The reduction shall be implemented in accordance with the approved plan on mandatory transfer of the commercial bank placed under special control.

Previously, Article 7 of Circular No. 30/2019/TT-NHNN only provided for a reduction of the required reserve ratio in the following cases:

• Credit institutions placed under special control;
• Credit institutions that have not yet commenced operations;
• Credit institutions approved for dissolution, subject to a decision on initiation of bankruptcy procedures, or subject to a decision on revocation of licenses by a competent authority.

Under the new regulation, the 50% reduction of the required reserve ratio applicable to such credit institutions applies to all types of deposits subject to required reserves, in accordance with the approved recovery plan.

3. New regulations on handling banks with deficient required reserves

Clause 5 Article 12 of Circular No. 30/2019/TT-NHNN previously prescribed the responsibilities of branches of the State Bank in provinces and centrally-run cities in handling credit institutions with a deficient amount of required reserves.

Within 30 working days after receiving a list of credit institutions with a deficient amount of required reserves from the State Bank’s Operations Center, to handle such credit institutions according to their competence or propose to the State Bank Governor measures to handle such credit institutions under current regulations, send decisions on handling of credit institutions with a deficient amount of required reserves to the State Bank Governor and concurrently to the Monetary Policy Department, Banking Supervision Agency, and Operations Center.

Accordingly, the responsibilities included:

• Handling within their competence; or
• Proposing handling measures to the Governor of the State Bank of Vietnam.

Handling decisions were required to be:

• Reported to the Governor of the State Bank of Vietnam; and
• Sent to the Monetary Policy Department, the Banking Supervision Agency, and the Central Banking Department.

Under the new regulation stipulated in Clause 5 Article 4 of Circular No. 23/2025/TT-NHNN, this provision is amended and supplemented as follows: handling violations or proposing handling measures within the competent authority for credit institutions with a deficient amount of required reserves.

In addition, the list of agencies receiving reports and handling decisions is expanded to include:

• Reporting to the Governor of the State Bank of Vietnam;
• Sending to the Monetary Policy Department, the Credit Institution Supervision Department, the Inspectorate of the State Bank, and the Central Banking Department.

At the same time, the phrase “branches of the State Bank in provinces and centrally-run cities” is replaced with “Regional State Bank Branches”, in line with the current policy on the two-tier local government system.

The above summarizes the major changes introduced by Circular No. 23/2025/TT-NHNN on required reserves applicable to banks and foreign bank branches.