VCN - After two times taking comments for the draft, recently, the Governor of the State Bank has officially issued Circular No. 43/2016 / TT-NHNN on consumer lending of financial companies to be effective from 15 March 2017.
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Each customer is allowed to borrow from finance companies up to 100 million vnd for house repairs and health treatment. Photo: HuuLinh
Accordingly, the Circular provides the concept of consumer lending in which the financial company lends loans in Vietnam dong to individual customers in order to meet the needs of buying,using goodsand services for consumption purposes of the customer and the customer's family, with total consumer loans of a customer in that financial company not exceeding VND 100,000,000 (one hundred million vnd).
This level of total loans does not apply to consumer loans for buyinga car and using that car as aguaranteed asset for the loan as provided by law.
Funding needs are to buy and use goods and services include the purchase of vehicles, furniture, household equipments; study expenses, medical treatment, tourism, culture, sports; house repairing costs.
The Circular regulates that financial companies are allowed to openpoints to introduce the servicesatplaces of goods or servicesto introduce consumer lending products, gather information and loan demands from customers. At the same time, financial companies are not allowed to undertake other activities at those points of services.
This Circular also requires financial companies to issue internal regulations on consumer lending to guide the collection, updating and checking data, customer information management, incorrect informationidentification and fraud prevention for lending decisions, controlling and collecting loans;debt collectingand urging measures; and the rules and standards of conduct in consumer loans and measures to ensure the full compliance of these rules and standards.
Also stipulated in Circular 43/2016/TT-NHNN is that consumer loan contracts must include the contents of thenotificationform to customers about scheduled repayments and interest where there is adjustment; applying principals and remedies if customers do not pay bills on time; and early repayment charges and conditions.
Especially, financial companies must issue regulations on the highest level of lending rate and thelowest level of lending rate for each consumer loan product for common application and submit to the State Bank for supervising.
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Financial companies must provide draft contract consumer loans to customers for consideration and decision before signing, and must get certified by the customers that they have been provided full information before signing the contract.
According to the State Bank, the promulgation of Circular 43/2016/TT-NHNN to complete the legal provisions to protect the interests of consumers, creates a legal basis for theconsumer loans operation of financial companies, ensuring consumer lending activities of financial companies with sustainable, safe, healthy and effective development.
Huong Diu / Luong Ngoc