Possibilities for banks to broaden their retail credit activities

DNHN - The newly issued circular enables banks to expand the scope of retail credit activities at a lower cost than in the past. With the release of Circular 06/2023/TT-NHNN the State Bank has issued a series of regulations governing

With the release of Circular 06/2023/TT-NHNN on September 1, 2023, the State Bank has issued a series of regulations governing the implementation of online lending. This allows banks to expand their retail credit operations at a lower cost than in the past.

This Circular 06 amends and supplements several articles of Circular No. 39/2016/TT-NHNN, which regulates the customer-lending activities of credit institutions and foreign bank branches (collectively referred to as banks).

Circular 06's regulation of online lending activities is one of its most notable components. Consequently, banks can make loans via electronic means by the credit institution's business conditions and loan characteristics, while maintaining security and safety. Information and data by the provisions of the law on anti-money laundering, electronic transactions, the State Bank of Vietnam's (SBV) guidance on risk management, and other relevant legal documents.

To ensure banks' accountability in the online lending process and the safety of this activity, the SBV requires banks' information systems to comply with system security regulations. Information system level 3 or higher and State Bank regulations regarding the security of information systems in banking operations.

When lending online, banks must store and preserve information and data by the law, as well as ensure safety, security, and backup to ensure the completeness and integrity of records. At the same time, records must be accessible for inspection, comparison, dispute resolution, complaints, and information provision when requested by competent state management agencies. authorization.

In addition, the SBV mandates that banks decide on the methods, forms, and technologies for online lending, assume the resulting risks (if any), and comply with minimum requirements.

Circular 06 includes regulation on outstanding loans for individual borrowers in the form of loans for living expenses that do not exceed 100 million VND at a credit institution. This classifies the bank's online lending service as a provider of small loans.

According to experts, this is a restrictive regulation designed to reduce risks associated with online lending. Consequently, customers with larger loan needs can continue to use the traditional method, and maintaining both online and traditional methods simultaneously is an appropriate decision in the current situation. in.

P.V (t/h)