Circular on consultancy activities of credit institutions, foreign bank branches effective from July 1, 2024.
Issuing New Circular Regulating the Consulting Activities of Credit Institutions and Foreign Bank Branches Effective from July 1, 2024?
On July 1, 2024, the Governor of the State Bank of Vietnam issued Circular 38/2024/TT-NHNN regulating the implementation of consulting activities on banking operations and other business activities of credit institutions and foreign bank branches.
Circular 38/2024/TT-NHNN applies to the following subjects:
- Commercial banks, cooperative banks, comprehensive finance companies, specialized finance companies, people's credit funds, microfinance institutions; foreign bank branches
- Organizations and individuals related to the consulting activities of credit institutions
Circular 38/2024/TT-NHNN is effective from July 1, 2024.
Credit institutions that have been granted licenses for banking and finance consulting activities; consulting in the field of banking and finance; consulting on banking and finance; financial consulting related to the field of microfinance according to the regulations of the Law on Credit Institutions 2010 and the amended Law on Credit Institutions 2017 may continue to perform consulting activities without having to request a re-issuance of the license until it is amended, supplemented, or exchanged for a new license.
There is a Circular regulating the consulting activities of credit institutions, foreign bank branches effective from July 1, 2024? (Image from the Internet)
What are the professional ethical standards for consultants of credit institutions and foreign bank branches?
Based on Article 7 of Circular 38/2024/TT-NHNN stipulating the professional ethical standards for consultants:
Professional ethical standards for consultants
Have professional knowledge about the consulting content for customers.
Be honest, fair, cautious, and upright; do not provide false information or information that misleads about the features, characteristics, or benefits of the transaction being consulted.
Act in the customer's interest; the consulting content should be appropriate to the information provided by the customer (if any) regarding the customer's situation, financial knowledge, behavioral capacity, social understanding, goals, and financial needs.
Secure and separate the customer's money and assets at the credit institution providing consulting services from the transaction being consulted unless there is another agreement between the parties.
Thus, consultants of credit institutions and foreign bank branches must meet the following professional ethical standards:
- Have professional knowledge about the consulting content for customers.
- Be honest, fair, cautious, and upright; do not provide false information or information that misleads about the features, characteristics, or benefits of the transaction being consulted.
- Act in the customer's interest; the consulting content should be appropriate to the information provided by the customer (if any) regarding the customer's situation, financial knowledge, behavioral capacity, social understanding, goals, and financial needs.
- Secure and separate the customer's money and assets at the credit institution providing consulting services from the transaction being consulted unless there is another agreement between the parties.
- Do not decide on behalf of the customer or influence the customer to make decisions; do not transfer the customer's information or information related to the consulting contract to a third party without the written consent of the customer unless requested by competent authorities as prescribed by law.
- Warn customers about possible risks when implementing the advised solutions and alternatives.
What are the principles of consulting activities of credit institutions and foreign bank branches?
Based on Article 5 of Circular 38/2024/TT-NHNN stipulating the principles of consulting activities of credit institutions and foreign bank branches as follows:
- Comply with legal regulations and be responsible for the consulting activities conducted by consultants and the consulting content.
- Be responsible for supervising the compliance with professional ethics and the performance of consulting activities by consultants.
- Ensure the independence, honesty, and objectivity of the consulting activities.
- Comply with regulations on customer information confidentiality during the provision of consulting services unless there is another written agreement with customers or other legal provisions.
- Credit institutions providing consulting services have the autonomy in consulting activities.
- Conducting consulting activities via electronic means must comply with legal regulations on electronic transactions.
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