Amid rising demand for infrastructure capital, this is seen as a technical adjustment with strategic significance: it both expands financial capacity for growth and imposes higher requirements on systemic risk management.
Removing capital bottlenecks for large-scale projects
According to the draft amendments to several provisions of Decision No. 09/2024/QD-TTg on conditions, documentation, and procedures for granting credit beyond prescribed limits, the state bank of Viet Nam proposes allowing credit institutions to exceed lending caps in certain cases, particularly for major and important projects in Ha Noi under Resolution No. 258/2025/QH15 of the National Assembly. The proposed limits would be no more than 38% of a bank’s equity for a single client and 52% for a group of related clients. These levels are significantly higher than current limits under the Law on Credit Institutions, which cap lending at 13% and 21%, respectively (and are set to decline further under the roadmap).
This adjustment reflects a reality: the scale of strategic infrastructure projects is becoming increasingly large, far exceeding the financing capacity under traditional credit ceilings. Data from the State Bank of Viet Nam shows that, with current equity levels of major commercial banks, lending capacity under the new mechanism is substantial. For example, with equity exceeding 222 trillion VND for Vietcombank and more than 229 trillion VND for Vietinbank, each bank could extend loans of up to around 87 trillion VND to a single client, or approximately 119 trillion VND to a group of related clients.
Meanwhile, according to estimates by the Ministry of Finance, many key projects in Ha Noi have total investment of around 300 trillion VND, with borrowing demands reaching up to 85% (equivalent to 255 trillion VND). Without a flexible mechanism, financing these projects through bank credit alone would be nearly impossible.
In practice, bank credit remains the primary source of funding for infrastructure projects in Viet Nam. Major projects such as the Son La Hydropower Plant, Lai Chau Hydropower Plant, Vinh Tan 4 Thermal Power Plant, and more recently the Quang Trach 1 Thermal Power Plant have all applied similar mechanisms for exceeding lending limits. More recently, the model of syndicated financing among commercial banks has been increasingly promoted. A typical example is the Ring Road 4 project in the Ha Noi Capital Region, with total investment exceeding 85 trillion VND, financed by a consortium of major banks.
Doan Viet Nam, Deputy General Director of Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV), said that in the context of an underdeveloped domestic capital market, bank credit continues to play as a “midwife” for infrastructure projects. However, to meet the increasing capital demand, the combining of diverse funding channels, from bonds and international capital to green finance funds, is an inevitable trend. From the perspective of credit institutions, relaxing lending caps not only addresses immediate capital constraints but also create favourable conditions for banks to enhance their financing capabilities and develop project finance products in line with international standards.
A driving force for the capital’s growth and regional spillover
The proposal to relax lending limits should be viewed within a broader context: the development strategy for the capital city of Ha Noi in the new phase. According to established orientations, Ha Noi aims for average GRDP growth of over 11% per year during 2026–2030, with GRDP exceeding 113 billion USD by 2030 and per capita income reaching at least 12,000 USD. To achieve these targets, the infrastructure system, from transport and energy to smart urban systems, must lead the way. This means that enormous capital demand cannot rely solely on the state budget.
In this context, the mechanism for exceeding credit limits could serve as a “lever”, activating private capital flows, promoting public-private partnership (PPP) models, and creating spillover effects across other sectors of the economy.
However, relaxing lending caps also raises concerns about increased credit concentration risks within the banking system. The amended Law on Credit Institutions sets a roadmap to gradually reduce lending ratios to a single client and related client groups to 10% and 15% by 2030, aiming to mitigate concentration risks and credit dispersion. Meanwhile, the new mechanism allows limits of up to 38% and 52% in specific cases. This policy contradiction requires careful handling.
The State Bank of Viet Nam affirms that approvals for exceeding credit limits will be conducted strictly, ensuring full compliance with existing legal regulations. However, international experience suggests that risks do not lie in written rules, but in implementation: project appraisal, risk management, and, above all, market discipline. If projects fail to deliver their expected efficiency, the consequences may not be confined to a single bank but could spread across the entire system, especially as loans are often syndicated.
Another point worth noting is that while bank credit plays a leading role, it cannot and should not be the sole source of infrastructure financing. Pham Thi Thanh Tam, Deputy Head of the Department of Financial Institutions (Ministry of Finance), said the department is proposing comprehensive amendments to the Law on Public Debt Management to create a more open legal framework for mobilising capital through government bonds, while also strongly developing the bond market and improving the national credit rating to access international capital at reasonable costs. At the same time, PPP mechanisms need to be reformed in a more substantive manner, especially revenue risk-sharing mechanisms — which are a key factor in attracting private investors.
The target of achieving stock market capitalisation of at least 100% of GDP by 2026 is an important indicator of the shift from a “credit-led” to a “capital market-led” model. In other words, the relaxing of lending limits is only a short- and medium-term solution. In the long term, the economy’s capital structure must be rebalanced to reduce dependence on the banking system.
Overall, the proposal to relax lending limits is a reasonable step in the current context, helping to remove capital bottlenecks for key projects, creating driving forces for growth and infrastructure upgrades. However, this policy can only be effective if accompanied by strict conditions: rigorous project selection, applied only to projects with clear socio-economic significance and clear cash flow; enhanced risk management standards, particularly in credit appraisal and post-lending supervision; and parallel development of capital markets to reduce pressure on the banking system. Otherwise, opening the “credit valve” could become a double-edged sword. It must balance between growth promotion and banking system safety, which is a key challenge for operators.
