On January 18, 2024, the National Assembly passed Law No. 32/2024/QH15 on Credit Institutions (“Law on Credit Institutions 2024”). The key points of the Law on Credit Institutions 2024 are as follows:
1. Responsibilities of credit institutions in protecting customers’ rights:
The Law on Credit Institutions 2024 stipulates the responsibilities of credit institutions, foreign bank branches in protecting customers’ rights, including:
– Participating in deposit insurance, ensuring the safety reserve fund of the people’s credit fund system, and publicly disclosing participation in deposit insurance at the head office and branches;
– Facilitating customers in depositing and withdrawing money, ensuring timely and full payment of principal and interest on deposits;
– Refusing to investigate, seal, seize, or transfer customers’ deposits, except when requested by competent state authorities or with the customer’s consent;
– Publicly disclosing deposit interest rates, service fees, rights, and obligations of customers for each type of product or service being provided;
– Publicly disclosing official transaction times
2. Prohibition of selling non-compulsory insurance with loans:
The Law on Credit Institutions 2024 strictly prohibits credit institutions, foreign bank branches, managers, executives, and employees of credit institutions, foreign bank branches from attaching the sale of non-compulsory insurance products to the provision of banking products or services in any form.
3. Approval of consumer loans:
The Law on Credit Institutions 2010 (amended in 2017) did not have specific provisions regarding small-value loans. The Law on Credit Institutions 2024 has added clear regulations that credit institutions must have minimum information about the legitimate use of funds, the financial capacity of customers before deciding to grant credit for small-value loans such as:
– Loans for daily life needs, credit card issuance;
– Financial lease, consumer loans, credit card issuance;
– Loans for the life needs of people’s credit funds;
– Loans from microfinance institutions.
Consumer Loans (Illustration)
The Law on Credit Institutions 2024 shall enter into force on July 1, 2024.
