Circular 17/2021/TT-NHNN amending Circular 19/2016/TT-NHNN on bank card operations

CIRCULAR

Amending and supplementing a number of articles of the Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card operations

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Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law on Amending and Supplementing a Number of Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Government’s Decree No. 101/2012/ND-CP dated November 22, 2012 on non-cash payment; the Government’s Decree No. 80/2016/ND-CP dated July 01, 2016 on amending and supplementing a number of articles of the Government’s Decree No. 101/2012/ND-CP; the Government’s Decree No. 16/2019/ND-CP dated February 01, 2019 on amending and supplementing a number of articles of the Decrees prescribing regulations on business conditions under the State management of the State Bank of Vietnam;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 prescribing functions, tasks, power and organizational structure of the State Bank of Vietnam;

At the request of the Director of the Department of Payment;

The Governor of the State Bank of Vietnam issues the Circular on amending and supplementing a number of articles of the Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card operations (hereinafter referred to as the Circular No. 19/2016/TT-NHNN).

Article 1. To amend and supplement a number of articles of the Circular No. 19/2016/TT-NHNN

1. To amend and supplement Clause 12, Article 3 as follows:

“12. Principal cardholder means an individual or organization that represents to conduct the agreement on card issuance and usage with a card issuer.”.

2. To add Clause 5 to Article 9 as follows:

“5. Card issuers must comply with the Basic standards for domestic chip cards when issuing cards with Bank Identification Number (BIN) issued by the State Bank in accordance with the roadmap prescribed at Article 27b of this Circular. Card issuers in special control times shall conduct the transformation roadmap in accordance with the decision of the Governor of the State Bank for each specific case.”.

3. To amend and supplement Clause 5, Article 10 (which is amended and supplemented in accordance with regulations in Clause 3, Article 1 of the Circular No. 26/2017/TT-NHNN dated December 29, 2017 of the Governor of the State Bank of Vietnam on amending and supplementing a number of articles of the Circular No. 19/2016/TT-NHNN) as follows:

“5. Before signing an agreement on card issuance and usage with customers, card issuers must request cardholders to provide all necessary information and documents to identify customers in accordance with the law regulations on anti-money laundering. In cases of issuing cards for foreigners, card issuers must require customers to provide necessary documents to verify the duration of residence in Vietnam, including: passport, visa, certificate of entry visa exemption, temporary residence certificate or temporary residence card or permanent residence card, labor contract or decision on recruitment, or other documents proving the period of residence in Vietnam. The documents of customers when signing an agreement on card issuance and usage shall be the original or a copy enclosed with the original for comparison or an electronic copy or a certified copy or a copy issued from the original book in accordance with law provisions. In cases of presenting the original for comparison, card issuers must certify the copy and take responsibility for the accuracy of the copy compared to the original. In cases where the documents are electronic copies, card issuers must have the solution and technology to collect, check and compare, to ensure that the electronic copies have the full, accurate content and exactly match the original ones in accordance with law provisions.”.

4. To add Clause 10 to Article 10 as follows:

"10. Card issuers can issue debit, credit, and prepaid cards for principal cardholders who are individuals by electronic means. Procedures for card issuance of individuals by electronic means shall comply with the regulations in this Article and Article 10a of this Circular.”.

5. To add Article 10a as follows:

“Article 10a. Issuing cards by electronic means

1. Card issuers must develop, issue and publicize the process and procedures for issuing cards of individuals by electronic means in accordance with the regulations of this Article, law regulations on anti-money laundering, law regulations on electronic transactions, relevant law regulations on ensuring safety, confidentiality of customer information and the operational safety of card issuers, at least including the following steps:

a) Collect necessary information and documents before signing an agreement on card issuance and usage with customers in order to identify customers and determine transaction limits of debit cards, identity prepaid cards and credit cards in accordance with regulations in Clause 5, Article 10; Clause 3 of this Article and Article 14 of this Circular, internal regulations of card issuers and other law regulations (if any);

b) Check, compare and verify customer identification information;

c) Warn customers about forbidden actions in the process of opening and using cards issued by electronic means;

d) Provide customers with a contract for card issuance and usage in accordance with the contents specified in Article 13 of this Circular and perform the signing of an agreement on card issuance and usage with customers to ensure the compliance with law provisions on electronic transactions;

dd) To inform the name of the card issuer, the name or trade mark of the card, the card number, the validity period (or the effective date) of the card, the name of the cardholder, the scope and function of the card, legal prohibitions when using the card for customers.

2. Card issuers shall have the right to decide on the methods, forms and technologies to identify and verify customers for card issuance by electronic means; take responsibility for the arising risks (if any) and must meet the following minimum requirements:

a) Having solutions and technologies to collect, check, compare and ensure the correct match between the customer identification information, the customer's biometric data (biological factors and characteristics which are directly associated with such customers, which perform the identification functions, which are difficult to be falsified and which have a low overlap rate such as fingerprints, face, iris, voice and other biometric factors) with the corresponding biometric information and factors stated in necessary documents to identify customers in accordance with law regulations on anti-money laundering, at the request of the card issuers or with the personal identification data authenticated by a competent state agency or by other credit institutions, foreign bank branches or by the organizations providing electronic identification and authentication services;

b) Having technical measures to confirm that the identified customer agrees with the contents of the card issuance and usage contract;

c) Developing a process of risk management, control and assessment, including measures to prevent acts of impersonation, interference, modification, or falsification of the verification of customer identification information before, during and after issuing the card to the customer; measures to check and verify customer identification information to ensure that the customer who make card transactions issued by electronic means is the principal cardholder. The process of risk management and control must be regularly reviewed and perfected based on the updated information and data during the service provision;

d) Storing and preserving, fully and in details over the time,  the customer identification information and data during the process of card issuance and usage, such as: the customer identification information; the customer's biometric factors; sound, images, video recordings, sound recordings; phone number to make the transaction; transaction log. The information and data must be stored safely and confidentially, backed up, must ensure the completeness and integrity of the data for the inspection, comparison, settlement of checks, complaints, disputes and provide information at the request of competent state management agencies. The storage period shall comply with the law regulations on anti-money laundering.

3. Card issuers shall base on the condition of the applied technology when identifying and verifying customers to asses risks and decide to apply the transaction limit to a customer who opens account by electronic means specified in Clause 2 of this Article, but must ensure that total transaction limit (including cash withdrawal, transfer, payment) of a customer's debit or prepaid card or credit card does not exceed 100 (one hundred) million Vietnam dong in one month and does not withdraw cash in foreign countries, make international payments.

4. Card issuers shall have the right to decide to apply the transaction limit for cards opened by electronic means which is higher than the limit specified in Clause 3 of this Article, and shall have the right to withdraw foreign currency by cash in foreign countries, and make international payments when applying one of the following measures:

a) Card issuers apply technology to check and compare the customer's biometric characteristics with the citizen biometric data through the citizen identification database;

b) Card issuers apply video call solution to collect, check and verify customer identification information during the card issuance process to ensure the same efficiency as the identification process through face-to-face meetings. The video call solution must meet at least the following requirements: ensure the safety and security; the high resolution; the signal continuity; allow real-time audio and visual interaction with customers to ensure real person identification; store all audio data, images or video recordings, audio recordings during the process of issuing cards for customers;

c) After card issuers have identified and verified customer information through face-to-face meetings with principal cardholders who are individuals.

5. The issuance of cards by electronic means specified in this Article shall not apply to the subjects specified at Point b Clause 1, Clause 2, Clause 3 Article 16 of this Circular. Card issuers shall only issue cards by electronic means to individual customers who are foreigners in accordance with the regulations in Clause 4, Article 16 of this Circular for debit cards.

6. The issuance of credit via overdrafted credit or debit cards, apart from complying with the regulations in this Article, must also comply with the regulations in Article 15 of this Circular.”.

6. To amend and supplement Point g, Clause 1, Article 13 as follows:

“g. Agreement on granting credit to the cardholders, including: limits and change of card usage limit, including overdraft limit (for debit card) and credit limit; interest rate, method of calculating loan interest, order of recovery of loan principal and interest (for overdrafted credit and debit cards); credit extension period, loan purpose, debt repayment term, minimum debt payment rate, debt payment method, penalty fee for overdue debt (if any). The agreement on granting credit to the cardholders may be stated in the card issuance and usage contract or in a separate written agreement;”.

7. To amend and supplement Point b, Clause 1, Article 15 as follows:

“b. Card issuers must have internal regulations on granting credit via credit cards in accordance with law regulations on safety assurance in credit granting activities, in which there must be specific regulations on subjects, limits, conditions, credit extension term, debt repayment term, debt repayment term rescheduling, minimum repayment rate, applicable interest rate, method of calculating loan interest, order of loan principal and interest recovery, fees penalties for overdue debts, loan purposes, appraisal process and decision to grant credit via cards in accordance with the principle of clearly separating responsibilities between the appraisal stage and the credit granting decision, measures to apply debt recovery to ensure the responsibility of departments at the card issuers in the debt collection process;”.

8. To amend and supplement Clause 2, Article 16 (which is amended and supplemented in accordance with regulations in Clause 7, Article 1 of the Circular No. 26/2017/TT-NHNN dated December 29, 2017 of the Governor of the State Bank of Vietnam on amending and supplementing a number of articles of The Circular No. 19/2016/TT-NHNN) as follows:

"2. For principal cardholders being organizations: Organization that are eligible to open payment accounts shall have the right to use debit cards. Organizations that are legal entities legally established and operating in accordance with the laws of Vietnam shall have the right to use identity cards and prepaid cards. Cardholders being organizations shall have the right to authorize in written to allow individuals to use their cards or to allow individuals to use the supplementary card in accordance with the regulations of this Circular.”.

9. To amend and supplement Clause 1, Clause 2 Article 17 as follows:

"1. Cardholders must fully and accurately provide necessary information at the request of the card issuers when signing an agreement on card issuance and usage and take responsibility for the truthfulness of the information they provide.

2. When using credit or debit cards that are overdrawn, the cardholders must use the money for the right purpose and pay in full and on time to the card issuers the loan amounts and interest arising from the use of the cards in accordance with the contract signed with card issuers.”.

10. To add Point e to Clause 3, Article 17 as follows:

“e. Debit cards, credit cards, and prepaid cards with identification issued by electronic means shall not be able to withdraw cash in foreign countries or make international payments, except for the case specified in Clause 4, Article 10a of this Circular.”.

11. To add Clause 4 to Article 17 as follows:

“4. Card issuers, acquirers shall take necessary measures to update, check, review, compare and identify customers in the process of using cards.”.

12. To add Clause 1a to Article 22 as follows:                                                                                                

“1a. Acquirers must comply with the Basic standards for domestic chip cards applicable to ATMs and card-accepting devices at the acquirers' point of sale in accordance with the transformation roadmap specified in Article 27a of this Circular. Acquirers in special control times shall perform the transformation roadmap in accordance with the decision of the Governor of the State Bank for each specific case.”.

13. To add Clause 1a to Article 27 as follows:

“1a. Card issuers, acquirers, merchants may refuse card-based payments when there is doubt about the truthfulness and transaction purpose of the cardholder in accordance with the law on anti-money laundering.”.

14. To amend and supplement Clause 3, Article 28 as follows:

“3. Card issuers shall send the schedule of service fees and charges of their own organizations at the request of the State Bank for monitoring Ans inspection.”.

15. To add Point d to Clause 1, Article 31 as follows:

“d) Act as a focal point to coordinate with relevant units in formulating and submitting to the Governor of the State Bank for issuing the decision on the roadmap for transforming domestic chip cards for each credit institution and foreign bank branch under special control.”.

Article 2. Implementation responsibility

The Chief of the Office, Director of the Department of the Payment, Heads of units under the State Bank of Vietnam; credit institutions, branches of foreign banks, switching organizations and clearing organizations, shall be responsible for implementing this Circular.

Article 3. Implementation provisions

1. This Circular takes effect from January 01, 2022.

2. Within 06 months from the effective date of this Circular, the card issuers shall take necessary measures to notify customers of new regulations related to the contract of card issuance and usage under the regulation in Clause 6, Article 1 of this Circular in the forms specified in the card issue and usage contracts, the written agreement with customers and on the official website of the card issuers. For the card issuance and usage contracts signed before the date on which this Circular takes effect and comply with law regulations at the time of signing the contracts, the card issuers shall re-sign the issuance and usage contracts and use the cards or the written agreement with customers in accordance with the regulations of this Circular at the request of the customers.

3. This Circular annuls Clause 2, Clause 3 Article 1 of the Circular No. 41/2018/TT-NHNN dated December 28, 2018 of the Governor of the State Bank of Vietnam on amending and supplementing the Circular No. 19/2016/TT-NHNN and Clause 4, Article 1 of the Circular No. 28/2019/TT-NHNN dated December 25, 2019 of the Governor of the State Bank of Vietnam on amending and supplementing a number of articles of the Circular No. 19/2016/TT-NHNN.

For the Governor

Deputy Governor

Pham Tien Dung