Vietnam’s regulation on ratios of investment in government bonds and government-backed bonds

According to Article 17 of Circular No. 22/2019/TT-NHNN of the State Bank of Vietnam, the maximum ratio of a bank’s or FBB’s investment in government bonds and government-backed bonds to its previous month’s total liability is 30%.

In which:

- Government bonds include:

+ Treasury bills;

+ Treasury bonds;

+ National development bonds.

- Government-backed bonds include:

+ Government-backed corporate bonds;

+ Government-backed bonds issued by policy banks;

+ Government-backed bonds issued by financial institutions and credit institutions.

Total purchases of Government bonds and government-backed bonds for determination of the maximum ratio mentioned above is the buying prices for Government bonds and government-backed bonds under the ownership of the bank or FBB, fiduciary purchases of Government bonds and government-backed bonds, exclusive of purchases of Government bonds and government-backed bonds from trust funds the risks of which are not taken by the bank or FBB.

A newly established bank or FBB (excluding credit institutions that are reorganized under the Law on credit institutions) that has been operating for less than 02 years and has a total liability smaller than its charter capital/assigned capital may invest in Government bonds and government-backed bonds with a ratio of up to 30% of its charter capital/assigned capital.

View other provisions at Circular No. 22/2019/TT-NHNN of the State Bank of Vietnam, effective from January 01, 2020.

Thu Ba

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