Vietnam central bank drafts higher lending limits

The policy is aimed first at Hanoi, where six recently extended projects have a combined planned investment of almost 2 quadrillion dong. Those include the Red River landscape corridor, budgeted at about 737 trillion dong, and the Hanoi International Sports Urban Area, projected to cost around 925 trillion dong.

It also reaches beyond the capital. Private groups including Vingroup, Sun Group and Masterise are said to need more than 752 trillion dong in funding for 18 major infrastructure projects, with the heaviest disbursements expected in 2026-2028. By excluding some infrastructure lending from banks’ credit-growth quotas, the central bank is also trying to prevent these projects from crowding out other borrowing.

For investors, the immediate read-through is to Vietnam’s banking sector. Lenders with strong deposit franchises and project-finance expertise, such as Techcombank, stand to gain from a larger addressable market and potentially faster loan growth, while the largest state banks could become the key financing engines for politically backed infrastructure.

But the easing lands against a fragile funding backdrop. Credit has been growing faster than deposits for much of 2021-2025, leaving a gap of as much as 2 quadrillion dong, according to local analysts. Raising the cap on short-term funds used for medium- and long-term lending to 40% and counting an extra 20% of Treasury deposits in deposit calculations may help banks stretch their balance sheets, but it also increases pressure on liquidity management if credit demand remains hot.

That concern is especially relevant with the Fed keeping rates elevated, which could add to exchange-rate pressure if Vietnam expands domestic lending aggressively. Local authorities say system liquidity has improved recently, with dong deposits up 8.77% through Aug. 22 versus credit growth of 8.38%, but the margin remains thin for an economy leaning heavily on long-dated infrastructure spending.

The next test is whether the draft rules are finalized quickly enough to match project timelines without forcing banks into a heavier maturity mismatch. If approved, the new ceiling would mark one of Vietnam’s boldest attempts yet to use bank leverage to solve the capital problem for its largest projects.