SIX KEY NEW POINTS OF THE 2025 LAW ON CREDIT INSTITUTIONS: WHAT BUSINESSES AND INDIVIDUALS NEED TO KNOW

On 15 October 2025, the Law on Credit Institutions (Amended) 2025 – Law No. 96/2025/QH15 will officially take effect. This is one of the most important legal instruments governing the operations of banks and credit institutions, and it directly affects all individuals, organizations, and businesses involved in borrowing, collateral, or financial transactions.

Many of the new provisions in this Law are expected to have a strong impact on the business environment, enhancing transparency in the banking system while also requiring businesses to exercise greater caution when entering into credit agreements.

1. Clearer right to seize collateral

• New point: The Law adds Article 198a, allowing banks and credit institutions to seize collateral if such right has been agreed upon in the contract and the collateral is not subject to dispute or enforcement seizure.
• Businesses should pay special attention when signing loan agreements, as in the event of a breach of obligations, banks may seize collateral immediately in accordance with the agreement. This mechanism strengthens financial discipline but also increases risks for businesses that do not manage cash flows effectively.

2. Regulations on handling seized assets and returning evidence

• New point: Where collateral is under enforcement seizure or related to a criminal case, the Law clearly defines the limits of asset handling. Assets serving as evidence in criminal cases may be returned to the securing party if such return does not affect criminal proceedings.
• This new regulation provides greater reassurance for businesses, as legitimate rights are better protected and the risk of “losing assets entirely” due to involvement in legal proceedings is significantly reduced.

3. State Bank authorized to grant special loans at 0% interest

• Instead of requiring approval from the Prime Minister as before, the State Bank of Vietnam (SBV) is now authorized to decide on special loans with an interest rate of 0% per year in emergency situations.
• This provision helps enhance the safety of the banking system and reduces systemic risks. Indirectly, businesses may benefit from a more stable banking system that can provide capital more smoothly.

4. Mandatory disclosure of information when seizing collateral

• Greater transparency in collateral enforcement: Before any seizure, credit institutions must publicly disclose information (on their website, at the commune/ward People’s Committee, and notify the securing party, etc.).
• Practical impact: This enhances transparency and gives businesses and individuals time to prepare, negotiate, or respond, helping to avoid “silent” or unexpected seizures.

5. Stricter regulations on authorization to seize collateral

• The amended Law only allows banks to authorize debt management companies or entities receiving compulsory transfers to carry out collateral seizure.
• Absolutely prohibited is the authorization to individuals or organizations that do not meet statutory conditions.
• Impact: Businesses and individuals are better protected against unlawful seizures, coercion, or abuse of power by unauthorized intermediaries.

6. Abolition of outdated provisions and reduction of cumbersome procedures

• Many obsolete provisions have been repealed, including the requirement for Prime Ministerial approval for special loans. This marks a step forward in reducing administrative complexity, enabling faster financial decision-making and creating a more flexible business environment for both banks and customers.

Conclusion

• Overall, the Law on Credit Institutions (Amended) 2025 not only aims to ensure the safety of the financial and banking system, but also directly affects the rights and obligations of businesses, organizations, and individuals.
• Key point to note: Businesses must exercise caution when signing credit agreements, especially by carefully reviewing clauses on collateral and seizure rights.
• Positive aspects: The new Law enhances transparency, protects legitimate rights, and reduces unnecessary administrative procedures.
• Recommendation: Businesses and individuals should promptly update their legal knowledge and consult legal experts or lawyers when entering into loan agreements to minimize risks.

In summary, understanding the new points of the Law not only helps protect one’s assets, but also enables businesses and individuals to seize opportunities in a more transparent and secure financial environment.

Celigal Law Firm Co., Ltd. is committed to providing comprehensive legal solutions, helping clients remain confident in the face of important changes introduced by the amended 2025 Law on Credit Institutions.