State Bank regulates consumer lending activities

In the document of the State Bank sent to banks recentlyTo prevent fraud and violations of the law on consumer lending, serve life, ensure customer rights,... the Governor requested credit institutions to strictly implement a series of requirements.

Firstly, credit institutions review internal regulations to ensure that they are fully promulgated in accordance with the law, especially internal regulations on lending for living needs, consumer lending, loan management, and issuance and provision of credit card payment services.

The second requirement is that banks and financial companies must comply with regulations.on interest rates and fees related to lending activities as prescribed in Circular 39. Strictly implement regulations on principles and methods of calculating interest and fees, and transparency of credit interest rates between credit institutions and customers.

In addition, banks must be transparent in lending activities such as posting standard contracts, providing customers with full information on interest rates, principles and factors determining interest rates in case of applying adjustable interest rates, overdue interest rates, types of fees and fee levels before establishing a loan agreement.

Particularly, consumer finance companies must issue full regulations on consumer loan interest rate frameworks applied uniformly throughout the system in each period, including the highest lending interest rate and the lowest lending interest rate for each consumer loan product and report to the State Bank on the lending interest rate framework according to the provisions of Circular 43.In particular, it is necessary to review and strictly manage service introduction points, employees, and partners of credit institutions to ensure compliance with internal regulations and laws.

Finally, banks and financial companies must improve the quality of their staff, limit possible ethical risks, and at the same timeCoordinate with authorities in capturing information, promptly notifying and warning in the system to have preventive measures, minimizing risks and violations.

The issuance of these rectification requests comes in the context that the Department of Competition and Consumer Protection said it continuously received consumer feedback related to FE Credit, a consumer finance company 100% owned by Vietnam Prosperity Bank (VPBank).

Specifically, they received phone calls and text messages asking them to pay their debts even though they did not borrow. Some of them have been called and harassed continuously for the past 6 months, with the highest frequency of calls being 10 calls a day. In addition, FE Credit's debt collection behavior shows signs of harassment and threats to consumers.These forms of harassment are currently causing frustration and affecting their daily lives and work.

Harassment of consumers will also be one of the contents of the State Bank Inspection and Supervision Agency's review during the upcoming inspection.