The issuance of a Official Dispatch to answer questions related to the lending activities of credit institutions and foreign bank branches to customers in Vietnam
Which Official Dispatch answers questions related to the lending activities of credit institutions and foreign bank branches to customers in Vietnam? - Ms. Luyen (Ha Noi)
The issuance of a Official Dispatch to answer questions related to the lending activities of credit institutions and foreign bank branches to customers in Vietnam
On November 8, 2023, the State Bank of Vietnam (SBV) issued Official Dispatch 8631/NHNN-CSTT in 2023 to answer questions related to the regulations in Circular 06/2023/TT-NHNN, which amends and supplements some articles of Circular 39/2016/TT-NHNN on the lending activities of credit institutions and foreign bank branches to customers.
The content of the circular includes 43 questions related to the following topics:
- Interpretation of terms
- Unacceptable loan purposes
- Order of principal and interest payments
- Internal regulations
- Loans through electronic means
- Transitional provisions
The issuance of a Official Dispatch to answer questions related to the lending activities of credit institutions and foreign bank branches to customers in Vietnam - Source: Internet
What is the scope of application of loans through electronic means in Vietnam?
According to the provisions in Section 5 of the Official Dispatch 8631/NHNN-CSTT in 2023, which answers questions about the content of Circular 06/2023/TT-NHNN amending and supplementing some articles of Circular 39/2016/TT-NHNN on lending activities of credit institutions and foreign bank branches to customers, the following are the requirements for loans through electronic means:
Question 18: Does the scope of application of loans through electronic means include individuals and legal entities, or is it only applicable to individuals?
Answer: According to the provisions of Circular 39/2016/TT-NHNN (as amended and supplemented), credit institutions (TCTD) consider and decide on loans through electronic means for customers borrowing from TCTD, including individuals and legal entities. However, for the provisions of Article 32b of Circular 39/2016/TT-NHNN (as amended and supplemented), TCTD identifies and verifies customer identification information (eKYC) to serve the activity of lending through electronic means (eKYC is only one step in the lending process through electronic means) for individual customers borrowing for living needs; not applicable to individual customers borrowing for business activities, other activities, and legal entities.
Pursuant to Article 32b of the Circular 39/2016/TT-NHNN (amended by Clause 11 Article 1 of the Circular 06/2023/TT-NHNN) stipulating as follows:
Identifying and verifying customer identification information
1. Credit institutions must have solutions and technical technologies to identify and verify customer identification information to serve the activity of lending through electronic means; be responsible for any risks that may arise (if any) and must ensure that at least the following requirements are met:
a) Ensure the accuracy of the match between the customer's identification information and the customer's biometric data (which are biological factors or characteristics associated with the customer and are difficult to forge, such as facial recognition, fingerprint recognition, or voice recognition).
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Through the guidance above, lending through electronic means applies to customers borrowing capital at credit institutions, including individuals and legal entities. However, the identification and verification of customer information (eKYC) in the activity of lending through electronic means only applies to individual customers borrowing capital to serve living needs.
Specifically, for individual customers borrowing capital to serve business activities, other activities, and legal entities, eKYC information verification is not required.
What types of deposits can't credit institutions in Vietnam lend for?
According to Clause 7 Article 8 of Circular 39/2016/TT-NHNN (amended by Clause 2, Article 1 of Circular 06/2023/TT-NHNN), the following are the loan purposes that are not allowed:
Loan purposes that are not allowed
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7. To deposit money.
8. To pay for the capital contribution, purchase, or transfer of shares of a limited liability company, a partnership; capital contribution, purchase, or transfer of shares of a public company that is not listed on the stock market or is not registered for trading on the Upcom trading system.
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In addition, Clause 13 Article 4 of the Law on Credit Institutions in 2010 provides the following:
Interpretation of terms
In this Law, the following terms are understood as follows:
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13. Receiving deposits is the activity of receiving money from organizations and individuals in the form of non-term deposits, term deposits, savings deposits, issuance of certificates of deposit, promissory notes, treasury bills and other forms of deposit according to the principle of full repayment of principal and interest to depositors in accordance with the agreement.
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According to Section 2 of the Response to Some Questions about the Contents of Circular 06/2023/TT-NHNN Amending and Supplementing Some Articles of Circular 39/2016/TT/NHNN issued with Official Dispatch 8631/NHNN-CSTT in 2023, it is clarified that credit institutions are not allowed to lend for capital needs with the purpose of depositing money. Credit institutions do not lend to deposit money through the following forms, including:
- Forms of non-term deposits, term deposits, and savings deposits.
- Issuance of certificates of deposit, promissory notes, and treasury bills.
- Other forms of receiving deposits according to the principle of full repayment of principal and interest to depositors in accordance with the agreement.
Best regards!
