Consumer credit counseling points of financial companies in Vietnam

Consumer credit counseling points of financial companies in Vietnam (Internet image)

1. What is consumer lending?

In Clause 1, Article 3 of Circular 43/2016/TT-NHNN, consumer lending is defined as a finance company extending a loan expressed in Vietnamese dong to an individual customer in order to meet his/her demand of fund for purchase or use of goods or services for his/her personal or family purposes in which the total outstanding balance of consumer credit owed by a customer to that finance company is not greater than VND 100,000,000 (one hundred million Vietnamese dongs).

The total outstanding balance of consumer credit prescribed by this Clause shall not apply to an auto loan under which the auto is pledged as collateral for that loan in accordance with laws.

According to Clause 2, Article 3 of Circular 43/2016/TT-NHNN (amended in Circular 18/2019/TT-NHNN), demand of fund for purchase or use of goods or services is comprised of:

- Demand of credit for purchase of means of transport, items or equipment for personal or family uses;

- Demand of Educational, medical examination and treatment, cultural, sports and physical activity;

- Demand of credit for payments of home repair costs.

2. Consumer credit counseling points in Vietnam

Consumer credit counseling points in Vietnam according to Article 6 of Circular 43/2016/TT-NHNN (amended in Circular 18/2019/TT-NHNN) is as follows:

- Finance companies carrying out consumer lending activities shall be allowed to open consumer credit counseling points at the place where consumer goods and services are supplied to advise and promote consumer credit lines, collect and receive information and demands for loans from customers in order to facilitate consumer lending operations.

Finance companies shall not be allowed to perform operations other than those stipulated in the previous paragraph at any consumer credit counseling point.

- Finance companies shall be required to enter into a contract to open their consumer credit counseling points with consumer commodity or service suppliers having their business facilities where the consumer credit counseling points of these finance companies will be established under which rights and liabilities of parties involved as well as term of that contract must be clearly defined.

- Finance companies shall assume responsibility for operating these consumer credit counseling points and ensuring that information about consumer credit lines extended to customers at such points are consistent, adequate and authentic.

- Finance companies shall report to the State Bank, subject to the following regulations:

+ Whenever it is necessary to substitute a manager or supervisor of a consumer credit counseling points, the finance company controlling such point must report to the State Bank branch in the province or city where the point is located under the following regulations:

++ Methods of sending and receiving reports: A report must be made in writing and sent to a State Bank branch in a province or city in one of the following modes: sending reports directly, by post or via electronic mails of that State Bank branch;

++ Time limit for sending reports: These reports must be sent within 05 (five) working days of receipt of the request for substitution of a manager or supervisor of a consumer credit counseling point;

++ A report shall be made by using the sample report shown in the Appendix No. 01 to Circular 43/2016/TT-NHNN.

+ In case of opening, closure or proposed opening or closure of a counseling point, a finance company shall have to report to the Banking Inspection and Supervision Agency and a State Bank branch in the province or city where that finance company decides to open, close, propose opening or closing that counseling point in accordance with the following regulations:

++ Methods of sending and receiving reports: A report must be made in writing and sent to the Banking Inspection and Supervision Agency and a State Bank branch in a province or city in one of the following modes: sending reports directly, by post or via electronic mails of the State Bank;

++ Report data shall be collected from the first day of the first month of the reporting quarter to the end date of the last month of the reporting quarter;

++ Time limit for sending reports: A report must be sent within 05 (five) working days beginning the first month of the quarter immediately preceding the reporting quarter;

++ A report of the Banking Inspection and Supervision Agency shall be made by using the sample report given in the Appendix No. 02 to Circular 43/2016/TT-NHNN; A report of a State Bank branch in a province or city shall be made by using the form given in the Appendix No. 03 to Circular 43/2016/TT-NHNN.

Appendix No. 02

Appendix No. 03

Quoc Dat

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