Banking Sector - New Credit Institution Law 2024

On 18 January 2024, the National Assembly passed the amended Law on Credit Institutions. The new law will serve to reduce banks’ exposure to large borrowers and large shareholders. These new measures will help to enhance risk governance and business practices among banks and support their asset quality. In addition, the new law now includes detailed and clearer guidelines on the regulator’s powers to intervene and address issues swiftly and effectively in ailing banks, for example, those facing deposit runs. These guidelines provide greater clarity and certainty over the regulatory actions that can be taken to resolve weak banks and maintain stability of the financial sector.