Decree 198 Thins the SBV Unit That Clears Foreign Banks Into the VIFC

Decree No. 198/2026/ND-CP, issued 3 June 2026, makes targeted amendments to the State Bank of Vietnam's internal organization — trimming divisions, renaming two departments, and formalizing the status of regional branch offices. The changes take effect 1 July 2026. For VIFC member banks, fintech operators, and foreign institutions in the licensing queue, the operational consequences are concentrated in one place: the International Cooperation Department loses two of its five internal divisions, making it the SBV unit most directly reshaped by this decree.

What the Decree Changes#

Decree 198 amends Article 3 of Decree No. 26/2025/ND-CP (24 February 2025), which governs the SBV's functions, powers, and organizational structure. The amendment is narrow: it does not rewrite the SBV's foundational mandate, alter its supervisory perimeter, or touch the two public non-business units (Vietnam National Credit Information Center and Banking Times).

The total unit count stays at 20. What changes is the number of internal divisions within departments and the names of two units.

Division Count Changes#

The figures in the table below are drawn from the Lao Dong before/after comparison of Decree 26/2025 and Decree 198/2026, not from an independent review of the Công Báo primary text. Verify against the Official Gazette version before relying on specific counts for operational decisions.

Forecasting and Statistics is the only department to emerge unchanged. Every other department in the table loses at least one division. The International Cooperation Department's reduction of two divisions stands out — it is the steepest proportional cut in the restructure, cut from five divisions to three, a 40% reduction.

Whether this reflects real capacity reduction or a lateral reorganization — with some bilateral desk functions absorbed by the Governor's Office or another unit — is not confirmed in the decree text or the official announcement. Practitioners with pending foreign-bank applications or VIFC foreign-institution approvals should contact the International Cooperation Department directly to understand how their file is being handled across the 1 July transition.

The Two Renames#

"Department of Credit for Economic Sectors" → "Department of Credit"

The removal of "for Economic Sectors" is the subtler but more consequential signal. The original name reflected Vietnam's state-directed banking heritage, in which credit policy was administered sector by sector — with quotas, guidance rates, and preferential windows for agriculture, export industries, and priority state enterprises. Dropping the qualifier moves the name closer to how neutral central banking frameworks describe credit oversight: as a macroprudential and risk-management function rather than an allocation tool.

Whether this rename signals an actual mandate change — away from directed credit and toward neutral supervisory oversight — or is purely cosmetic cannot be confirmed from the decree text alone. The full text of Decree 26/2025 specifying the Credit Department's original mandate would clarify what functions were assigned to it and whether any have been reassigned. Until that confirmation is available, treat the rename as a directional signal worth monitoring, not a confirmed policy shift.

For VIFC-zone entities, the practical question is whether the renamed Credit Department's oversight posture will evolve alongside its title — specifically, whether credit facilities extended by VIFC member banks to VIFC-zone borrowers will continue to be classified under the same sectoral framework, or whether new guidance will follow.

"Department of Forecasting, Statistics – Monetary and Financial Stability" → "Department of Forecasting, Statistics"

Dropping "Monetary and Financial Stability" from the Forecasting department's name is subtle. One reading is that the stability-monitoring function has been transferred to another unit — possibly the Monetary Policy Department or a newly defined function under the Governor's Office. Another reading is that the name change is administrative housekeeping, with the function remaining within the department.

This matters because the Forecasting and Statistics Department produces the macro data that VIFC investors track most closely: credit growth targets, monetary aggregates, and the periodic stability assessments that inform the SBV's guidance to the market. If the financial stability function has migrated elsewhere, investors and analysts will need to update the SBV contact they monitor for systemic risk signals. The decree text does not resolve this question, and the Lao Dong comparison of the two decrees does not clarify where the stability function now sits.

Regional Branch Clarification#

Decree 198 adds language that was absent from Decree 26/2025: Transaction Departments and State Banks in the Region are administrative organizations equivalent to departments under the SBV. This formalizes what was already understood in practice — that the HCMC and Da Nang regional SBV offices carry departmental authority — but the explicit codification matters for VIFC-zone banks interacting with those offices on licensing, inspection, and compliance matters. Decisions and correspondence from regional SBV branches now have an unambiguous organizational footing in the parent decree.

Why This Is Happening Now#

Vietnam's government administrative simplification drive has reshaped multiple ministries across Q1–Q2 2026. The Ministry of Finance, Ministry of Industry and Trade, and several other line ministries have all trimmed internal division structures during this period. The SBV's restructuring follows the same direction — maintaining the top-level department count while reducing sub-divisional layers, consistent with a broader trend of sub-divisional reduction across line ministries in 2026. It is worth noting that Decree 198 does not itself cite Resolution 18-NQ/TW as its legal basis; the connection to that broader administrative streamlining program is contextual rather than formally stated in the decree.

The SBV has managed this with less disruption than ministries that underwent full mergers or major mandate reallocation. Keeping the unit count at 20 while cutting internal divisions is the path of least operational disruption: external counterparties still deal with the same named departments; internal workflow changes are managed inside the department.

What This Means for VIFC Participants#

Five SBV departments are most operationally relevant to the VIFC:

1. International Cooperation Department — foreign bank licensing, bilateral central-bank arrangements, foreign-institution interface for VIFC applicants. Now at 3 divisions, down from 5. The most direct impact on VIFC operations.
2. Credit Department — credit policy oversight affecting VIFC-zone lending mandates and sectoral classification. Renamed; one division cut.
3. Foreign Exchange Management Department — FX licensing and dual-track account oversight under Circular 72/2025. Not listed in the division changes table, suggesting its structure was not amended by Decree 198. For Circular 72 mechanics, see our guide to Circular 72 and VIFC forex rules.
4. Payment Department — digital payment oversight and fintech licensing. Reduced from 4 to 3 divisions.
5. Legal Department — regulatory interpretation, legal opinion on VIFC instruments. Reduced from 3 to 2 divisions.

The Payment and Legal departments are relevant to VIFC fintech operators and to the domestic bank subsidiaries currently seeking VIFC authorization. A two-division Legal Department is lean for an institution processing the regulatory complexity that the eight VIFC implementing decrees have generated. Foreign-law firms advising VIFC entrants should build in additional lead time for formal legal opinion requests to the SBV.

For foreign bank applicants specifically, the International Cooperation Department's sharply reduced division structure — cut from five divisions to three — is the immediate concern. The department was already managing bilateral engagements with dozens of foreign central banks and international financial institutions alongside the VIFC's foreign-institution licensing queue. Processing the same workload with 60% of its previous divisional capacity is an operational challenge regardless of how the reorganization is structured internally. The AA- credit rating barrier under Decree 329 already constrains which foreign banks can enter; applicants who do qualify should engage early with the International Cooperation Department before the 1 July restructure takes full effect.

What Comes Next#

Three things to monitor as the 1 July 2026 effective date approaches:

Mandate guidance from renamed departments. If the Credit Department or the Forecasting and Statistics Department issues new internal guidance, terms of reference, or public-facing communications that define their post-restructure mandate, that will clarify whether the renames were cosmetic or substantive. Watch for any SBV Governor decision (Quyết định) that updates the functions of these two departments.

Financial stability reporting location. The SBV's next periodic stability assessment or credit growth guidance will reveal whether the financial stability function still sits within Forecasting and Statistics or has been relocated. Institutional investors monitoring Vietnam's monetary policy signals should track which department publishes the next stability-related communication.

Processing timelines at International Cooperation. Foreign bank applicants and VIFC foreign-institution sponsors should ask their SBV counterparts directly — before 1 July — whether their file will be assigned to a named division under the new structure and what the expected processing timeline is. Transition periods in administrative reorganizations routinely generate file-handling gaps that extend timelines by weeks or months.

This article is based on the official government announcement published via vietnam.vn on 3 June 2026 and the Lao Dong before/after comparison of Decree 26/2025 and Decree 198/2026. The full Vietnamese-language text of Decree 198 from the Official Gazette (Công Báo) has not been independently reviewed; specific provisions — including the division counts cited in the table above — should be verified against that primary source before acting on them. We will update this article once the Công Báo text is confirmed and any follow-on departmental guidance is issued.