On September 16, 2025, the Prime Minister of Vietnam issued Decision No. 2070/QĐ-TTg, approving a comprehensive scheme to abolish and simplify administrative procedures in the finance–banking sector. The decision forms part of a broader national effort to remove institutional bottlenecks, reduce compliance burdens, and enhance competitiveness for financial institutions operating under the supervision of the State Bank of Vietnam (SBV).
This reform marks a pivotal step in implementing the Government’s administrative reform program for the 2021–2030 period, aligning with Vietnam’s goal of building a transparent, efficient, and innovation-friendly financial system.
1. Scope of Reform and Legal Foundation
The simplification effort targets procedures concerning:
-
The establishment and operation of credit institutions;
-
Payment and credit activities;
-
Microfinance programs and projects;
-
Stock listing of credit institutions on domestic and foreign exchanges; and
-
Mergers and consolidations of credit institutions.
The legal foundation of this reform draws primarily on the 2024 Law on Credit Institutions, Circular 32/2024/TT-NHNN (issued June 30, 2024), and Decision 20/2017/QĐ-TTg on microfinance management. Decision 2070/QĐ-TTg serves as a transitional policy instrument pending the issuance of a new decree expected to replace Decision 20/2017/QĐ-TTg.
2. Key Procedural Simplifications
(a) Banking Establishment and Branch Opening
-
The long-standing condition that a commercial bank must have been in operation for at least 12 months before opening new domestic branches has been abolished.
-
The requirement that banks must not have been subject to administrative sanctions for operational safety, asset classification, or provisioning under Article 6.1(h) of Circular 32/2024 has been removed.
-
Additional conditions regarding the real value of charter capital and the operation status of previously approved branches have been replaced with a general obligation to comply with the Law on Credit Institutions and SBV supervision mechanisms.
→ Legal Impact:
This shift replaces prescriptive, rule-based licensing with principles-based supervision, granting banks greater flexibility in expansion while reinforcing post-licensing compliance monitoring by the SBV.
(b) Stock Listing and Public Offering by Credit Institutions
The Decision eliminates several restrictive business conditions for listing shares domestically or abroad, notably:
-
Minimum operation period of two years;
-
Requirement that the real value of charter capital not fall below legal capital;
-
Obligation to have profitability for two consecutive years before application; and
-
Mandatory compliance with safety ratios for six consecutive months preceding the dossier submission.
Also abolished are financial governance conditions such as:
-
Maintaining a bad debt ratio below 3% in two consecutive quarters;
-
Requirements on personnel composition of the Board of Directors and Supervisory Board;
-
Internal audit and control structure criteria.
→ Legal Impact:
The removal of these requirements is expected to accelerate capital market access for banks, reduce procedural delays, and align Vietnam’s listing standards with international best practices emphasizing disclosure and ongoing supervision over pre-qualification conditions.
(c) Microfinance Programs and Projects
Under the new framework:
-
The requirement for registration certificates for microfinance programs and projects under Decision 20/2017/QĐ-TTg is abolished.
-
Procedures for issuing or modifying registration certificates for projects operating in one or two provinces are eliminated.
-
A new decree is being drafted to regulate operations of microfinance programs run by political, socio-political, and non-governmental organizations, replacing outdated provisions.
→ Legal Impact:
This significantly reduces compliance barriers for grassroots financial inclusion initiatives, allowing microfinance institutions to scale up operations with fewer procedural constraints while maintaining SBV oversight on prudential grounds.
(d) Merger and Consolidation of Credit Institutions
Decision 2070 simplifies merger procedures by removing the following requirements:
-
The merged entities no longer need to demonstrate absence of prohibited economic concentration under competition law; and
-
The prior condition of having an approved merger/consolidation scheme under Article 12 of Circular 32/2024 is abolished.
→ Legal Impact:
The new regime enables faster consolidation within the banking sector, supporting the Government’s policy of promoting voluntary restructuring and enhancing financial stability without overregulation.
3. Implications for Market Participants
-
Commercial banks gain enhanced freedom to expand branch networks and list shares, potentially increasing market dynamism and competition.
-
Microfinance and cooperative credit institutions benefit from reduced bureaucracy and clearer operational mandates.
-
Foreign investors and institutional shareholders will find Vietnam’s financial sector more accessible and aligned with ASEAN and global regulatory trends.
-
The SBV, conversely, will need to strengthen supervisory mechanisms and risk-based monitoring to offset reduced ex-ante control.
4. Strategic and Policy Assessment
From a policy standpoint, Decision 2070/QĐ-TTg signifies a regulatory paradigm shift—from heavy pre-licensing scrutiny toward a post-licensing compliance and risk supervision model. This reflects international best practices adopted by jurisdictions such as Singapore, Malaysia, and the EU, where emphasis is placed on transparency, capital adequacy, and corporate governance rather than procedural formality.
It also supports Vietnam’s banking sector restructuring strategy (2021–2030), encouraging market-driven consolidation, strengthening institutional capacity, and enabling the financial system to better support digital transformation, fintech, and sustainable finance.
5. Conclusion
Decision 2070/QĐ-TTg represents one of the most substantial deregulatory initiatives in Vietnam’s financial sector over the past decade. By dismantling outdated procedural barriers and aligning with global norms, the Government is sending a clear signal of its commitment to financial liberalization, administrative transparency, and investment facilitation.
In practical terms, the new legal environment is expected to:
-
Lower entry and expansion costs for domestic banks;
-
Facilitate public listings and capital mobilization;
-
Encourage mergers and acquisitions that strengthen sectoral resilience; and
-
Foster a more inclusive financial system capable of supporting Vietnam’s next phase of economic modernization.
—
Prepared by Lexora Partner – Legal Insights & Regulatory Commentary
https://lexorapartner.com.vn
