Credit cards may not allow withdrawals exceeding 5 million VND per day.

The low spending limit is intended to ensure customers only use the funds when necessary, in line with international practices and also to mitigate risks.

The State Bank of Vietnam has just announced a draft Circular amending and supplementing Circular No. 19/2016 regulating banking card operations.

Accordingly, regarding cash withdrawals using cards abroad, to limit the use of cash (foreign currency) withdrawn from cards for purposes not permitted under foreign exchange laws, the draft regulations stipulate that cash withdrawal transactions using cards abroad will be subject to a maximum daily limit.

The draft clearly states that for cash withdrawals in foreign currency abroad, a card can withdraw a maximum of 30 million VND in cash per day.

In the near future, credit cards will be limited to daily withdrawals of up to 5 million VND.

For VND cash withdrawals from cards at merchant locations, each card is limited to a maximum of 5 million VND per day. The drafting committee explained that this is to mitigate risk and therefore a daily limit on cash withdrawals via POS terminals at merchant locations is necessary (a low limit for use only in necessary cases, consistent with international practices).

The draft also stipulates that, in the case of issuing secured credit cards, the credit limit granted to the cardholder shall not exceed 80% of the value of the collateral and shall not exceed 1 billion Vietnamese Dong. In the case of issuing unsecured credit cards: The maximum credit limit granted to the cardholder is 500 million Vietnamese Dong.

According to the drafting committee, this issue has no precedent in practice, so when it is first allowed to be implemented after the amendment of the Law on Credit Institutions, it needs to be considered carefully. The draft regulations aim to limit the maximum credit limit according to each case of credit card issuance (with or without collateral).

Furthermore, this draft amendment also expands the scope of credit card users. Accordingly, the State Bank of Vietnam will expand the eligibility criteria for primary cardholders aged 15 to 18 for credit and debit cards with overdraft facilities, in order to align with the regulations on eligible borrowers under the Law on Credit Institutions.

The regulation regarding the issuance of non-overdraft debit cards to supplementary cardholders aged 6 and above needs to be amended because it is not feasible in practice for banks currently implementing it.

Simultaneously, based on several real-life cases, the draft Circular adds regulations regarding the issuance of cards to foreigners to limit the situation where foreigners enter the country for a short period, obtain cards, then leave and use the cards to commit or abet criminal activities.

Therefore, the draft regulations stipulate that in the case of a foreigner using the card, they must have a residence permit in Vietnam for a period of 12 months or more. The validity period of the card in this case shall not exceed the remaining period of their residence permit in Vietnam.

According to VNN