Principles of consultancy activities of credit institutions and foreign bank branches in Vietnam from July 1, 2024

Principles of consultancy activities of credit institutions and foreign bank branches in Vietnam from July 1, 2024 (Image from the internet)

On July 1, 2024, the Governor of the State Bank of Vietnam issued Circular 38/2024/TT-NHNN prescribing consultancy activities of credit institutions and foreign bank branches.

Principles of consultancy activities of credit institutions and foreign bank branches in Vietnam from July 1, 2024

Credit institutions providing consultancy activities must ensure the implementation of the following principles:

- Comply with legal regulations and be responsible before the law for the consultancy activities performed by their consultants and the consulting content.

- Be responsible for supervising the adherence to professional ethics and the implementation of consultancy activities by their consultants.

- Ensure the independence, honesty, and objectivity of consultancy activities.

- Comply with customer information confidentiality regulations during the provision of consultancy activities, except where there is a different written agreement with the customer or as otherwise provided by law.

- Credit institutions providing consultancy activities have the autonomy in their consultancy activities.

- The implementation of consultancy activities via electronic means must comply with legal regulations on electronic transactions.

(Article 5 Circular 38/2024/TT-NHNN)

Ethical standards of consultants of credit institutions and foreign bank branches in Vietnam from July 1, 2024

Consultants are employees of credit institutions providing consultancy activities, assigned and tasked to directly advise customers as per the agreement in the consulting contract.

According to Article 7 Circular 38/2024/TT-NHNN, the professional ethical standards of bank consultants from July 1, 2024, include:

- Having professional knowledge on the consulting content provided to customers.

- Being honest, fair, cautious, and upright; not providing false or misleading information about the features, characteristics, and benefits of the advised transaction.

- Acting in the interest of customers; the consulting content provided must be consistent with any information provided by the customer (if any) about their financial status, behavioral capacity, social understanding, financial goals, and needs.

- Keeping customer funds and assets safe and separate at credit institutions providing consultancy activities, except where there is a different agreement.

- Not deciding on behalf of customers or influencing customers to make decisions; not transferring customer information or information related to the consulting contract to third parties without the written consent of the customer, except at the request of competent authorities as per legal provisions.

- Warning customers about potential risks that may arise when implementing the advised solutions and plans.

Scope of consultancy activities of credit institutions and foreign bank branches in Vietnam from July 1, 2024

- Credit institutions providing consultancy activities are only allowed to offer consultancy activities related to banking operations and other business activities stipulated in the License issued by the State Bank to that credit institution.

- Solutions and plans stipulated in Clause 1, Article 3 Circular 38/2024/TT-NHNN must be executed by the credit institution providing consultancy activities or other appropriate credit institutions within the scope of banking operations and other appropriate business activities as per the License issued by the State Bank.

(Article 4 Circular 38/2024/TT-NHNN)

Nguyen Ngoc Que Anh

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