Current situation and solutions to enforce laws on credit rating of commercial banks in Vietnam

The commercial banking system plays a pivotal role in ensuring economic stability and fostering growth in Vietnam. Internal credit rating has become an indispensable tool for assessing borrowers’ repayment capacity and credit risk; however, the enforcement of legal provisions governing credit rating criteria at commercial banks still faces numerous challenges. This paper analyses the current implementation of laws on internal credit rating in Vietnamese commercial banks, focusing on the consistency of regulations, the practical capacity of banks, and the conditions for technology and data infrastructure. Using document analysis, legal analysis and comparative research with selected international experiences, the study clarifies key shortcomings in law enforcement, including fragmented and partly outdated regulations, limited professional competence in credit risk assessment, incomplete and unshared databases, and insufficient application of digital technology. The findings indicate that improving the effectiveness and transparency of credit activities requires a synchronous approach that combines reform of the legal framework, enhanced supervisory powers and tools of the State Bank of Vietnam, systematic capacity-building for bank staff, and accelerated digitalisation of credit rating systems. The paper proposes a number of legal and institutional solutions aimed at strengthening law enforcement in this field and aligning Vietnam’s credit rating practices more closely with Basel II and Basel III standards.