Central bank proposes stricter rating rules for foreign investors buying bank shares

The State Bank of Vietnam is seeking comments on a draft decree that would require foreign organisations acquiring 10 per cent or more of the charter capital of Vietnamese credit institutions to meet clearer credit-rating standards, while cutting the approval time for such transactions from 40 days to 19 working days.

A draft decree amending and supplementing a number of Decree 86/2024/ND-CP on risk provisioning by credit institutions and Decree 01/2014/ND-CP on the purchase of shares in Vietnamese credit institutions by foreign investors is expected to be soon issued.

Regarding Decree 01, the draft focuses on two major issues: conditions for foreign organisations purchasing shares in Vietnamese credit institutions and the time limit for approving applications for such purchases.

Under current regulations, a foreign organisation seeking to acquire shares so as to own 10 per cent or more of the charter capital of a Vietnamese credit institution must be assessed by reputable international credit rating agencies as having a stable outlook or an equivalent or higher rating.

According to the SBV, however, the existing rules refer only to the credit-rating outlook and do not specify the actual rating level required of the foreign organisation. The draft decree therefore adds provisions on eligible credit rating agencies, minimum rating levels and the timing for determining rating results.

Specifically, a foreign organisation must be rated BBB- or higher by Standard & Poor’s (S&P) or Fitch Ratings, or Baa3 or higher by Moody’s.

Where ratings issued by another international credit rating agency are used, the agency must be registered with or recognised by the European Securities and Markets Authority, or licensed by a competent authority of a G7 country to conduct credit rating activities. The assigned rating must not be lower than the corresponding level set by S&P, Moody’s or Fitch Ratings. The credit-rating outlook must also be stable or equivalent or higher.

The draft decree also revises the time limit for processing applications by foreign investors to purchase shares in Vietnamese credit institutions.

Under the proposed regulation, the SBV would have 19 working days from the date of receipt of a complete and valid dossier to issue a written decision approving or rejecting the share purchase by a foreign organisation, compared with 40 days under current rules. In case of rejection, the reasons must be clearly stated.

The proposed shorter processing time is intended to implement the plan on cutting and simplifying administrative procedures under the Government’s Resolution 24/2026/NQ-CP.

The SBV said the draft decree is also designed to address difficulties arising from the implementation of Decree 01/2014/ND-CP and ensure consistency with the 2024 Law on Credit Institutions, as revised in 2025.

- (VLLF)