Circular 38/2024/TT-NHNN consultancy services of credit institutions and foreign bank branches

CIRCULAR

On consultancy services of credit institutions and foreign bank branches

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

Pursuant to the January 18, 2024 Law on Credit Institutions;

Pursuant to the Government’s Decree No. 102/2022/ND-CP of December 12, 2022, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the request of the Director of the Department of Legal Affairs;

The Governor of the State Bank of Vietnam promulgates the Circular on consultancy services of credit institutions and foreign bank branches.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular provides the provision of consultancy services on banking activities and other business activities by credit institutions and foreign bank branches.

Article 2. Subjects of application

1. Commercial banks, cooperative banks, general finance companies, specialized finance companies, people's credit funds, microfinance institutions; foreign bank branches (below referred to as credit institutions).

2. Organizations and individuals relating to consultancy services of credit institutions.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Consultancy on banking activities and other business activities (below referred to as consultancy) means a credit institution carrying out one or some activities, including collecting and processing information, applying professional knowledge, identifying and evaluating matters to propose solutions and plans suitable with the scope of its consultancy services specified in Article 4 of this Circular at the request of its customers.

2. Consultant means an employee of a credit institution providing consultancy services who are assigned and tasked with providing direct consultancy to customers under a consultancy contract.

3. Customer means an organization (including other credit institution) or individual who uses consultancy services of a credit institution. Customers who use consultancy services of a people's credit fund are its members.

4. Credit institution providing consultancy services means a credit institution whose license granted by the State Bank of Vietnam (State Bank) specifies the consultancy on banking activities and other business activities.

Article 4. Scope of consultancy services

1. Credit institutions providing consultancy services may only provide consultancy services on banking activities and other business activities specified in its license granted by the State Bank.

2. The solutions and plans specified in Clause 1, Article 3 of this Circular shall be implemented by credit institutions providing consultancy services or other credit institutions within the scope of banking activities and other business activities specified in their licenses granted by the State Bank.

Article 5. Principles of consultancy services

Credit institutions providing consultancy services must adhere to the following principles:

1. To comply with regulations and bear responsibility before law for consultancy services given by consultants and the contents of consultancy.

2. To bear responsibility for the supervision of consultants in complying with professional ethics and providing consultancy services.

3. To ensure the independence, truthfulness and objectivity of consultancy services.

4. To comply with regulations on protection of the confidentiality of customer information during the provision of consultancy services unless otherwise agreed in writing with customers or otherwise prescribed by law.

5. To have autonomy in consultancy services.

6. The provision of consultancy services by electronic means must comply with regulations on e-transactions.

Chapter II

SPECIFIC PROVISIONS

Article 6. Internal regulations

1. In pursuance to this Circular and other relevant regulations, credit institutions providing consultancy services shall formulate internal regulations on consultancy services before providing consultancy services.

Within 10 days after the promulgation or amendment, supplementation or replacement of internal regulations, credit institutions providing consultancy services shall hand deliver or send by post to the State Bank’s provincial-level branches (for credit institutions providing consultancy services being microfinance institutions and people’s credit funds) or to the State Bank (the Banking Supervision Agency) for other credit institutions.

2. Internal regulations on consultancy services of credit institutions providing consultancy services must at least contain the following contents:

a/ The process of receiving customer requests and signing of consultancy contracts;

b/ The process of providing consultancy services, including collecting and processing information, applying professional knowledge, identifying and evaluating matters to propose solutions and options suitable with the scope of its consultancy services specified in Article 4 of this Circular; and risk management of consultancy services;

c/ Responsibilities and obligations of each division and individual related to the provision of consultancy services. Tasks to be performed by and prohibited for consultants during the consultancy process;

d/ Professional ethical standards for consultants specified in Article 7 of this Circular and responsibilities of credit institutions providing consultancy services in supervising the compliance with professional ethics;

dd/ Regulations on training and organization of training, regular testing and evaluation of consultants’ professional quality;

e/ The process of receiving and settling customers’ complaints about consultancy services.

Article 7. Professional ethical standards for consultants

1. To have professional knowledge about the content of consultancy for customers.

2. To be honest, fair, cautious and incorruptible; not to provide false information or misleading information about the features, characteristics and benefits of advised transactions.

3. For customers’ interests, to provide contents of consultancy consistent with the information provided by customers (if any) about their financial situation and knowledge, behavioral capacity, social understanding, and financial objectives and needs.

4. To ensure the safety for and segregate customers’ money and assets at credit institutions providing consultancy services from advised transactions unless otherwise agreed by the parties.

5. Not to make decisions instead of their customers or influence their customers in making decisions; not to transfer customer information or information related to consultancy contracts to third parties without customers’ written consent, except at the request of competent authorities specified by law.

6. To warn customers of risks that may arise upon the implementation of the advised solutions and options.

Article 8. Customer contact

In case a consultant intends to provide his/her customer with consultancy on a product, service or transaction that is not yet requested by the latter, the consultant must inform and obtain the latter’s consent before doing so.

Article 9. Charges for consultancy services

Credit institutions providing consultancy services may collect charges for consultancy services. Charge rates in consultancy services must be publicly posted and must be stated in consultancy contracts.

Article 10. Consultancy contracts

1. Credit institutions providing consultancy services and customers must agree on the terms and commitments in consultancy contracts in accordance with law.

2. A consultancy contract must at least contain the following contents:

a/ Name, address and other contact methods (if any); an at-law representative or authorized representative of the credit institution providing consultancy services; name, address and other contact methods (if any) of the customer being an organization; name, address, personal identification number and other contact methods (if any) of the customer being an individual;

b/ Objectives and scope of consultancy;

c/ Methods of providing consultancy;

d/ Rights and obligations of the credit institution providing consultancy services;

dd/ Rights and obligations of the customer;

e/ The implementation period of the contract;

g/ Charges for consultancy services and methods of payment;

h/ Dispute settlement methods;

i/ Contract validity;

k/ Contract term;

l/ Agreements on the concerned party’s responsibilities to compensate for damages upon the breach of the contract.

3. Amendments and supplements to the consultancy contract shall be carried out under the concerned parties’ agreements in accordance with this Circular and relevant laws.

Chapter III

IMPLEMENTATION PROVISIONS

Article 11. Effect

1. The Circular takes effect on July 1, 2024.

2. On the effective date of this Circular, credit institutions licensed to provide banking and financial consultancy services; consultancy services in the banking and finance sector; consultancy on banking and finance; financial consultancy relating to microfinance under the June 16, 2010 Law on Credit Institutions and the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions may continue to provide consultancy services specified in this Circular but must not request the re-grant of the licenses until they are amended, supplemented or renewed.

Article 12. Organization of implementation

The Chief of the Office, Director of the Department of Legal Affairs, Chief of the Banking Supervision Agency, directors of the State Bank’s provincial-level branches, credit institutions and foreign bank branches shall implement this Circular.-

For the State Bank Governor
Deputy Governor
DOAN THAI SON