Vietnam to Scrap Credit Growth Cap in 2026 to Boost Lending

Vietnamese Prime Minister Pham Minh Chinh has directed the central bank to remove the annual cap on credit growth starting next year, the government said Thursday.

Instead, the State Bank of Vietnam (SBV) is urged to develop standards that ensure banks operate in an “efficient and healthy” manner.

The current credit growth cap is 16%, a tool used since 2011 to control inflation and stabilize the financial system following a period of overheating.

While the quota system once played a key role, its limitations are becoming apparent as Vietnamese banks now follow Basel II and III risk frameworks.

Authorities believe the cap could hinder economic recovery and growth.

As of June 30, credit in the economy had increased 9.9% since the end of 2024, surpassing VND 17.2 quadrillion (approximately USD 678 billion), according to local media reports.