Vietnam: Ratios of purchase of and investment in government bonds

According to Article 17 of the Circular No. 23/2020/TT-NHNN of the State Bank of Vietnam, ratios of purchase of and investment in government bonds and government-backed bonds are prescribed as follows:

1. The maximum ratio of a non-bank credit institution’s purchase of or investment in government bonds and government-backed bonds to its previous month’s total liability must be 10%.

2. Government bonds, including:

- Treasury bills;

- Treasury bonds;

- National development bonds.

3. Government-back bonds, including:

- Government-back corporate bonds;

- Government-backed bonds issued by policy banks;

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

4. Total purchases of and investments in Government bonds and government-backed bonds for determination of the maximum ratio mentioned in Clause 1 of this Article is the buying prices of Government bonds and government-backed bonds under the ownership of the non-bank credit institution, exclusive of purchases of or investments in Government bonds and government-backed bonds from trust funds, the risks of which are not taken by the non-bank credit institution.

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

More details at the Circular No. 23/2020/TT-NHNN of the State Bank of Vietnam, effective from February 14, 2021.

Thuy Tram

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