Official Dispatch 8631/NHNN-CSTT 2023 answers to questions related to Circular 06/2023/TT-NHNN

ANSWERS TO SOME QUESTIONS RELATED TO THE CIRCULAR NO. 06/2023/TT-NHNN DATED JUNE 28, 2023, AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE CIRCULAR NO. 39/2016/TT-NHNN DATED DECEMBER 30, 2016, PROVIDING FOR THE PROVISION OF LOANS BY CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES TO CLIENTS

^{___________________}

(Issued together with the Official Dispatch No. 8631/NHNN-CSTT dated November 08, 2023)

1. Interpretation of terms

Question 1: For Point c Clause 6 Article 2 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), it is proposed to give guidance on what minimum content is required on plans/projects serving borrowers’ consumption needs, such as purchase, construction or renovation of houses; or acquisition of land use rights for construction of houses?

Answer: According to the Circular No. 39/2016/TT-NHNN, fund use plan means a set of information on the use of funds by a client, containing information on business plans and projects (Point c Clause 6 Article 2); a client, who has a demand for a loan, shall send credit institutions and foreign bank branches (credit institutions) documents proving their eligibility for loans according to Article 7 and other documents guided by credit institutions (Article 9); credit institutions shall issue internal regulations on loan provision and management of loans in conformity with the characteristics of its business activities (Article 22). Point c Clause 6 Article 2 of the Circular No. 39/2016/TT-NHNN (supplemented under Point a Clause 1 Article 1 of Circular No. 06/2023/TT-NHNN) regulates information on plans/projects serving borrowers’ consumption needs, such as purchase, construction or renovation of houses; or acquisition of land use rights for construction of houses. Accordingly, the contents of the plans and projects implemented by the credit institution comply with the credit institution's internal regulations.

Question 2: As prescribed at Point c Clause 6 Article 2 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), must all loans serving borrowers’ consumption needs have a plan/project?

Answer: As prescribed at Point c Clause 6 Article 2 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), in case the clients borrow loans to serve their consumption needs, not for purchase, construction or renovation of houses; or acquisition of land use rights for construction of houses, the clients’ fund use plan is not required the information about the plan or project.

2. Demands ineligible for borrowing loans

Question 3: Is a foreign loans provided in the form of goods purchase/sale on deferred payment a foreign loans in the form of import of goods on deferred payment?

Answer: According to the Circular No. 12/2022/TT-NHNN dated September 30, 2022, guiding foreign exchange management for foreign loan borrowing and repayment of enterprises, foreign loan means a foreign loan not eligible for Government guarantee (below referred to as loan provided on the principle of self-borrowing and self-repayment) or a foreign loan eligible for Government guarantee in any form of foreign loan borrowing under a loan contract, contract on import of goods on deferred payment, entrusted loan contract or financial leasing contract, or issuance of debt instruments on the international market by a borrower. Accordingly, foreign loan provided in the form of goods purchase/sale on deferred payment mentioned in Clause 6, Article 8 of the Circular No. 39/2016/TT-NHNN (amended and supplemented in Clause 2, Article 1 of the Circular No. 06/2023/TT-NHNN) means a foreign loan in the form of a goods import contract with deferred payment according to current regulations on management of foreign loan borrowing and repayment of enterprises not eligible for Government guarantee.

Question 4: Are credit institutions provided loans for premature repayment of the existing loan from organizations and individuals (other than loans from credit institutions)?

Answer: As prescribed in Clause 6, Article 8 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions may consider and decide on loans for premature repayment of the foreign loans when fully meeting the conditions prescribed at Points a and b, Clause 6, Article 8 of the Circular No. 39/2016/TT-NHNN (amended and supplemented in Clause 2, Article 1 of the Circular No. 06/2023/TT-NHNN) and when the clients meet loan conditions prescribed in the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 5: In case the client is provided loans for purchase of house, the credit institution disburses loans and freezes the amounts of loans disbursed until the client completes the house purchase procedure. Is it a loan to deposit money?

Answer: In case the client is provided loans for purchase of house, the credit institution disburses loans and freezes the amounts of loans disbursed until the client completes the house purchase procedure. It does not fall into loans for depositing money.

Question 6: The credit institutions may not provide loans for depositing money in what forms at credit institutions, do such forms include certificates of deposit issued by credit institutions?

Answer: As prescribed in Clause 7, Article 8 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions may not provide loans for the purpose of depositing money. As prescribed in Clause 13, Article 4 of the Law on Credit Institutions (amended and supplemented), deposit taking means receiving money from an organization or individual as demand or term deposit, savings deposit, issuing deposit certificates, bills or treasury bills, and other forms of receiving deposits on the principles of full payment of principals and interests to depositors under agreement. Accordingly, the credit institutions may not provide loans for the purpose of purchasing deposit certificates issued by such lending credit institution or another credit institution.

Question 7: Is the disbursement by credit institutions to clients' payment accounts to make payment for consumer expenses considered credit institutions’ loan provision for depositing money?

Answer: According to the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions may consider and decide on loans for paying living expenses for borrowers' consumption; disbursement by credit institutions to clients' payment accounts for clients to pay living expenses is one of the loan disbursement methods and ensures compliance with regulations in the Circular No. 39/2016/TT-NHNN (amended and supplemented) and the Circular No. 21/2017/TT-NHNN. Accordingly, the the disbursement by credit institutions to clients' payment accounts to make payment for consumer expenses does not fall into credit institutions’ loan provision for depositing money.

Question 8: As prescribed in Clause 7 Article 8 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), may credit institutions provide loans to clients for making deposits?

Answer: As prescribed in Article 7 and Article 22 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions may consider and decide on loans to clients when they fully meet the loan conditions; the credit institutions issue its internal regulations on loan provision and management of loans in conformity with the characteristics of its business activities. Accordingly, the credit institutions provide loans to clients for making deposits when clients meet all loan conditions, in accordance with the internal regulations on loan provision and management of loans issued by the credit institutions.

3. Order of recovery of loan principal and interest

Question 9: Interest on overdue unpaid principal is the interest payable arising on the overdue principal balance of the repayment period or is the interest due on the unpaid repayment period? What is the order of recovery of interest on overdue unpaid principal mentioned above?

Answer: As prescribed in Clause 4 Article 18 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the interest on overdue unpaid principal is the interest payable arising on the overdue principal balance of the repayment period. The order of recovery of interest on overdue unpaid principal mentioned above is agreed upon by the credit institution and the client.

Question 10: For a client with many overdue loans, is a credit institution required to prioritize the recovery of the furthest overdue loan?

Answer: As prescribed in Clause 4 Article 18 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions and clients agree on the order of recovery of loan principal and interest; the Circular No. 39/2016/TT-NHNN (amended and supplemented) does not regulate such order of recovery when clients have many overdue loans.

4. Internal regulations

Question 11: The provision of loans for payment to secure obligation performance is as prescribed at Point b Clause 2 Article 22 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), what legal provisions are required to secure obligation performance?

Answer: Article 292 of the Civil Code regulates the measures to secure the performance of obligations. Depending on the client's demand for loans to secure the performance of specific obligations (escrow, deposit, etc.), according to the provisions at Point b Clause 2 Article 22 and Clause 5 Article 26 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions and clients agree in the loan agreement for this loan demand and credit institutions must freeze the amounts of loans disbursed at lending credit institutions in accordance with laws and agreements between the parties until the security obligation terminates.

Question 12: For Clause 2, Article 22 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), it is proposed to give guidance on clarifying criteria to determine the “specific” level of internal regulations; criteria/level of control for lending purposes; evaluation criteria for great value loans to be controlled?

Answer: As prescribed in Article 22 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions shall, based on the Law on Credit Institutions, the Circular No. 39/2016/TT-NHNN (amended and supplemented) and relevant legal regulations, issue internal regulations on loan provision in conformity with the characteristics of its business activities. Accordingly, the credit institutions shall issue its internal regulations on loan provision, which specifically includes the minimum content required as prescribed in the Circular No. 39/2016/TT-NHNN (amended and supplemented), in conformity with characteristics and types of loans and potential clients for credit institutions to implement throughout the system.

Question 13: For some contents adjusted in the Circular No. 06/2023/TT-NHNN but not adjusted in the Circular No. 43/2016/TT-NHNN (consumer loans) such as the concept of single loan, loan provided within a line of credit, which document (the Circular No. 06/2023/TT-NHNN or the Circular No. 43/2016/TT-NHNN) does the finance company apply?

Answer: Consumer lending finance companies comply with Circular No. 43/2016/TT-NHNN (amended and supplemented); in case the Circular No. 43/2016/TT-NHNN (amended and supplemented) does not stipulate, the contents related to lending activities of consumer finance companies shall comply with the Circular. No. 39/2016/TT-NHNN (amended and supplemented). Accordingly, in case of single loan and loan provided within a line of credit, the finance companies shall comply with the Circular No. 43/2016/TT-NHNN (amended and supplemented).

Question 14: Do credit institutions have to require clients to provide documents proving the loan use for overdraft loans?

Answer: As prescribed in Clause 3, Article 94 of the Law on Credit Institutions (amended and supplemented), the credit institutions have the right and obligation to inspect and supervise the loan use and repayment by clients. Accordingly, in case of lending under the overdraft limit on a payment account, the credit institutions are obliged to inspect and supervise the use of loan by clients.

Question 15: It is proposed to clarify the regulations that at least once a year, the credit institutions shall consider re-determining the maximum line of credit and is this limit line maintenance period understood as the maximum credit line issuance period of 12 months?

Answer: As prescribed in Clause 4 Article 27 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institution shall determine, and agree with the client on, the maximum line of credit to be maintained within a certain period; this regulation does not limit the period of loans based on line of credit. At least once a year, the credit institutions shall consider and re-determine the maximum line of credit and the duration of its maintenance; in case of any change, the credit institution and the client must re-sign the contract on line of credit.

5. Online lending

Question 16: Shall online lending specified in Section 3 of the Circular No. 39/2016/TT-NHNN (amended and supplemented) apply in case all online lending stages are carried out or even cases where one or several stages are applied by online lending?

Answer: The credit institutions shall consider and decide to provide online loans for one or several stages or the entire lending process as prescribed in Section 3 of the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 17: Is the information systems used for online lending required to be classified as level-3 information systems according to Clause 2, Article 32a of the Circular No. 39/2016/TT-NHNN (amended and supplemented)?

Answer: Clause 2, Article 32a of the Circular No. 39/2016/TT-NHNN (amended and supplemented) stipulates that the information systems used for online lending must comply with regulations on assurance of safety of information systems at level 3 or higher level under the Government’s regulations on assurance of level-based safety of information systems and the State Bank of Vietnam’s regulations on security of information systems in banking operations. Clause 1, Article 5 of the Circular No. 09/2020/TT-NHNN dated October 21, 2020 stipulates that information systems providing online services to clients shall carry out classification in accordance with the Decree No. 85/2016/ND-CP and classification applicable to other information systems shall comply with Clauses 2, 3, 4, 5, 6, 7 Article 5 of the Circular No. 09/2020/TT-NHNN. Accordingly, the credit institutions’ information system providing online services to clients must comply with regulations on assurance of safety of information systems at level 3 or higher level.

Question 18: Does the scope of application of online lending include individuals and legal entities or does it only apply to individuals?

Answer: According to the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions shall consider and decide on online lending for the borrowers of credit institutions, including individuals and legal entities. Particularly for Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions shall identify and verify know-your-customer information (eKYC) serving online lending (eKYC is just a stage in the online lending process) for individual clients who apply for consumer loans; it does not apply to individual clients who apply for business or other activities and clients who are legal entities.

Question 19: Can credit institutions provide online loans for other loan demands other than consumer loans?

Answer: The credit institutions shall consider and decide to provide online lending for consumer loans, business activities and other activities according to Section 3 of the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 20: As prescribed at Point c, Clause 1, Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), must the credit institutions collect sounds, images, video and audio recordings of clients for storage and preservation as prescribed when the clients apply for loans or when these elements arise during the lending process? In fact that when identifying and verifying know-your-customer information for online lending, the credit institutions can carry out through know-your-customer information, biometric data (fingerprints/iris, etc.), it is not necessary to record audio or video of the clients. In such case, there will not be these elements for storage and preservation.

Answer: As prescribed at Point c Clause 1 Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions shall adopt technical solutions and technologies to identify and verify know-your-customer information serving online lending; be responsible for arising risks (if any) and must ensure the minimum requirements, including adequate and detailed storage and preservation of know-your-customer information and biometric data of the clients; sound, images, video recordings, audio recordings; phone numbers used to make transactions; and transaction log during the lending process. Accordingly, the credit institutions shall consider and decide to choose technical solutions and technologies to deploy the storage and preservation of information and data in the process of identifying and verifying know-your-customer information serving online lending; However, information and data (including audio and video recordings, etc.) must be fully guaranteed according to regulations.

Question 21: Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented) regulates that the identification and verification of know-your-customer information by electronic means (eKYC) under Clause 1 shall only apply to individual clients with consumer loans. Accordingly, is it correct for individual clients with loans for business activities and legal entities that have not applied eKYC as prescribed in Article 32b?

Answer: Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), regulates that the identification and verification of know-your-customer information by electronic means and applies to individual clients who apply for consumer loans. Individual clients who apply for consumer loans for business and other activities and clients who are legal entities are not allowed to identify and verify know-your-customer information by electronic means in Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented) for serving online lending, must comply with relevant regulations in the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 22: In case an individual has established a relationship verified by electronic means or in person with a credit institution before, can the credit institution decide on technological measures to verify clients for online lending? In case the client’s know-your-customer information has been identified, verified and each time the client apply for loan, the system authenticates the client using the following factors: username, password and OTP code, does it comply with the Circular No. 06/2023/TT-NHNN?

Answer: Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented) regulates the identification and verification of know-your-customer information applicable to individual clients who apply for consumer loans; does not apply to legal entities and individual clients applying for loans for business and other activities. In case the individual client who applies for consumer loans has established a relationship at the credit institution and completed the identification and verification of know-your-customer information (by electronic means or in person), the credit institution shall consider and decide on measures, forms, and technical technologies to verify know-your-customer information for online lending in compliance with known information about clients as stipulated in Clause 2, Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 23: For clients who have established a relationship with a credit institution, verify by electronic means (i.e. the clients have opened an account using the banking App, completed all electronic verification steps according to regulations on account opening) and apply for online lending, is it limited to a total loan balance of 100 million dong?

Answer: In case the individual client (has established or has not established a relationship with a credit institution), whose know-your-customer information can be verified by electronic means according to Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), requests to apply for online lending, the credit institutions shall consider and decide on the online lending for consumer loans and the maximum outstanding balance of this client by electronic means at a credit institution of 100 million dong. In case a credit institution fails to identify and verify client information as prescribed in Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented) but implements the relevant regulations in the Circular No. 39/2016/TT-NHNN (amended and supplemented), credit institutions shall consider and decide on online lending without limiting the total loan balance to a maximum of 100 million dong at a credit institution.

Question 24: For  an individual client who have been identified by a credit institution, verified know-your-customer information at the transaction counter and/or by electronic means (eKYC) and established a relationship with a credit institution, upon applying for online lending on consumer loans and being verified by the credit institution with client information according to Clause 2, Article 32b, will the client have a loan balance limit of 100 million dong? In case the client is identified, verified know-your-customer information at the transaction counter and performs other steps in the online lending process, will the client have a loan balance limit of 100 million dong?

Answer: According to the Circular No. 39/2016/TT-NHNN (amended and supplemented), the individual client who applies for consumer loans and is identified and verified by a credit institution by electronic means, when having a demand for a loan, is limited to a maximum loan balance of 100 million dong at the credit institution. Accordingly:

- For the individual client whose know-your-customer information is identified and verified at the transaction counter and/or by electronic means and has established a relationship with a credit institution, upon having demand of online lending on consumer loans and being verified known information about clients by electronic means by the credit institution in accordance with Clause 2, Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the client is limited to a maximum loan balance of 100 million dong at a credit institution.

- In case the client is identified, verified know-your-customer information by the credit institution at the transaction counter and performs other steps in the online lending process, the client is not limited to the loan balance of 100 million dong.

Question 25: Is the credit balance limit prescribed in Article 32c calculated based on loans signed from September 1, 2023 (not based on the previous loans)?

Answer: The Circular No. 06/2023/TT-NHNN (amended and supplemented) takes effect from September 1, 2023. Accordingly, the regulations on the limit of online lending balance in Article 32c of the Circular No. 39/2016/TT-NHNN (amended and supplemented) applies to loans signed from September 1, 2023; does not apply to loans signed before September 1, 2023.

Question 26: Loan balance specified in Article 32c of the Circular No. 39/2016/TT-NHNN (amended and supplemented) is understood as only the balance principal or including principal, interest and other financial obligations and when is this loan balance determined?

Answer: Loan balance specified in Article 32c of the Circular No. 39/2016/TT-NHNN (amended and supplemented) is the balance principal and the maximum online lending balance at a credit institution at all times applicable to one individual client who applies for consumer loans and are identified and verified know-your-customer information according to Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 27: The client declares loan request information without attaching documents, but based on the information declared by the client and other information collected by the bank from the client, the bank shall appraise whether it meets Article 32d of the Circular No. 39/2016/TT-NHNN (amended and supplemented)?

Answer: As prescribed at Article 32d of the Circular No. 39/2016/TT-NHNN (amended and supplemented), upon having demand for a loan, the clients must send to the credit institutions the documents and data proving eligibility for loans in accordance with Article 7 of the Circular No. 39/2016/TT-NHNN (amended and supplemented) and other documents and data according to the instructions of the credit institution (including information declared by the client).

Question 28: Instructions on how to understand the individuals/divisions building, establishing and operating information technology systems, including individuals and divisions building lending products.

Answer: As prescribed in Article 32dd of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the individuals and divisions building, establishing and operating information systems to serve the appraisal and decision on loan provision, include the individual and division building lending product.

Question 29: Are credit institutions responsible for appraisal results, lending decisions and assigning responsibilities to each individual and division of these stages in case of hiring a third-party platform/system to serve the appraisal and lending decision stages?

Answer: According to the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions are responsible for their own lending decisions (Article 3); the credit institutions shall appraise clients' ability to meet loan conditions to consider lending decisions (Article 17); the credit institutions shall organize loan approval according to the principle of assigning responsibilities to each individual and division to build, establish and operate an information system serving the appraisal and lending decision stages (Article 32dd). Accordingly, the credit institutions are solely responsible for lending decisions and assign responsibilities in organizing loan approval according to regulations (including hiring third-party platforms/systems prescribed by laws).

Question 30: In Article 32e of the Circular No. 39/2016/TT-NHNN (amended and supplemented), is the loan agreement in case of an electronic contract implemented in accordance with the law on e-transactions and containing the specified contents stipulated in Article 23 of the Circular No. 39/2016/TT-NHNN (amended and supplemented) appropriate?

Answer: The law on e-transactions has regulations on the implementation of electronic contracts and the content of the loan agreement must have at least the contents specified in Article 23 of the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 31: In Article 32e of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the loan agreement must be concluded by the legal representative of the credit institution or by any assigned/authorized individual with representative authority such as establishing/signing a credit contract in the "traditional" method.

Answer: The Circular No. 39/2016/TT-NHNN (amended and supplemented) does not stipulate the authority to sign loan agreements. Accordingly, the credit institutions must base on current law to regulate the assignment and authorization of representatives of credit institutions to enter into loan agreements with clients, including electronic contracts (if any) at internal regulations of credit institutions.

Question 32: In fact, with some current credit products (for example, a loan with an outstanding balance of only 100 million dong), there will be no approved minutes and no competent persons because the scoring system has corresponding sets of conditions installed, and when these conditions are met, the information technology system will automatically return the results of qualified loans/ineligible loans. It is proposed to clarify "competent person", "minutes clearly stating the approved decision" specified at Point c Clause 1 Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Answer: In case a credit institution develops criteria for loan approval based on credit score and these criteria have been approved by individuals or collectives before implementing automatic approval on the system for electronic loans, the decision to approve these approval criteria is considered as the lending decision of the competent person or the collectives’ minutes of the lending decision.

Question 33: According to Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented), if a competent person approves on the system, then prints the Loan Decision from the system and signs it directly, is that a violation of regulations?

Answer: The signature of the competent person on the decision on loan provision is shown in the form of a signature (in person) or an electronic signature, which is considered, decided by the credit institution and selected in accordance with the law.

Question 34: In Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented), in case the credit institutions appraise and approve credit automatically (without the participation of appraisers or approvers), the electronic signature of the competent person on decision on loan provision is understood as the signature of the person approving the system's loan criteria/conditions, or the credit institution must have the loan approver and attach the electronic signature of such person?

Answer: As prescribed at Point c Clause 1 Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the decision on loan provision must have an electronic signature of the competent person; in case of a collective decision, there must be the minutes clearly stating the approved decision. The electronic signature of the competent person is the signature of the person approving the set of loan criteria/conditions of the information system serving the loan appraisal and decision stage or the electronic signature of the loan approver according to internal regulations of credit institutions. In case a credit institution uses electronic signatures, it must ensure compliance with relevant regulations on electronic transactions.

Question 35: Request the State Bank to provide guidance on how to determine the competent person to sign the decision on loan provision in Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented)?

Answer: The credit institutions shall comply with internal regulations to ensure that loan documents have the electronic signature of the competent person. In case of a collective decision, there must be the minutes clearly stating the approved decision. The electronic signature of the competent person is the signature of the person approving the set of loan criteria/conditions of the information system serving the loan appraisal and decision stage or the electronic signature of the loan approver according to internal regulations of credit institutions. Based on Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions shall issue appropriate internal regulations.

Question 36: In Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented), in case of a collective decision, can the minutes be made in electronic form? Is the use of electronic signatures/digital signatures on minutes consistent with regulations?

Answer: As prescribed in Article 32g of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions prepare loan documents in the form of data messages in accordance with law on storage and law on e-transactions and relevant laws, including the minutes clearly stating the approved decision (if any). A credit institution uses electronic signatures, it must ensure compliance with relevant regulations on electronic transactions.

Question 37: It is proposed to guide the credit institutions in cases of failure to retain individual client records according to regulations when the client is the subject of personal data requesting deletion of personal data (as stipulated by Article 16 of the Decree No. 13/2023/ND-CP: The personal data subject is required to delete their personal data).

Answer: The Decree No. 13/2023/ND-CP dated April 17, 2023 of the Government on personal data protection excludes cases prescribed by the specialized laws. Accordingly, credit institutions apply Article 96 of the Law on Credit Institutions (amended and supplemented) and guiding documents regulating retention of dossiers of loan provision.

Question 38: In case a credit institution provides loans in some stages electronically, can the dossiers of loan provision be kept as electronic messages or as paper records?

Answer: The credit institutions shall consider and decide whether to retain dossiers of loan provision in the form of electronic messages or paper records according to the provisions of law.

Question 39: The regulations that the credit institutions can consider and decide on disbursement of loan amounts to clients' payment accounts in Article 32h of the Circular No. 39/2016/TT-NHNN (amended and supplemented) only apply to clients establishing relationships with credit institutions for the first time and being identified and verified know-your-customer information according to Clause 1, Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented) or apply to all clients who have established relationships at credit institutions and completed the identification and verification of know-your-customer information and is applied measures to identify and verify information by the credit institution as prescribed in Clause 2, Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented)?

Answer: Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented) regulates the identification and verification of know-your-customer information applicable to individual clients who apply for consumer loans, establish a relationship at a credit institution for the first time; and the individual client who apply for consumer loans, have established a relationship at a credit institution and completed the identification and verification of know-your-customer information. As prescribed at Article 32h of the Circular No. 39/2016/TT-NHNN (amended and supplemented), in cases the clients who applies for consumer loans and have been identified and verified know-your-customer information in accordance with Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions shall consider and decide on disbursement of loan amounts to clients' payment accounts at payment service providers for clients to make payment to the beneficiary according to the purpose of the committed consumer loans.

Question 40: In case individual clients who apply for consumer loans and have been identified and verified know-your-customer information according to Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), can the credit institutions disburse loan amounts to clients' payment accounts without being limited by the Circular No. 21/2017 /TT-NHNN on the loan disbursement methods and is there no limit to the amount disbursed to the client's payment accounts?

Answer: As prescribed in Article 32h of the Circular No. 39/2016/TT-NHNN (amended and supplemented), in cases the clients who apply for consumer loans and have been identified and verified know-your-customer information in accordance with Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institutions shall consider and decide on disbursement of loan amounts to clients' payment accounts at payment service providers for clients to make payment to the beneficiary according to the purpose of the committed consumer loans. In the case of disbursement to the clients’ payment accounts mentioned above, a credit institution must ensure that the online lending balance for a client at that credit institution does not exceed 100 million dong as prescribed in Article 32c of the Circular No. 39/2016/TT-NHNN (amended and supplemented).

Question 41: In case an individual client who applies for consumer loans (loan of less than 100 million dong) and has been identified and verified know-your-customer information by electronic means according to Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented), the credit institution shall disburse loan amounts to the client's payment account for the client to make payment to the beneficiary. Therefore, does the credit institution add the loan disbursed by the above disbursement method in the list of loans disbursed directly to clients and must it comply with the ratio as prescribed in Article 8a of the Circular No. 43/2016/TT-NHNN (amended and supplemented)?

Answer: As prescribed in Clause 5 Article 3 of the Circular No. 43/2016/TT-NHNN (amended and supplemented), the direct disbursement to customers means that finance companies disburse consumer loans directly to clients in cash or through the use of non-cash payment services as mutually agreed upon in consumer loan contract, ensuring inspection and supervision of the purposes of loan use in accordance with law. Accordingly, in case the individual clients who apply for consumer loans (under VND 100 million), have been identified and verified know-your-customer information by electronic means by the credit institution according to Article 32b of the Circular No. 39/2016/TT-NHNN (amended and supplemented) and disbursed by the financial company to the client's account in accordance with Article 32h of the Circular No. 39/2016/TT-NHNN (amended and supplemented), this loan is included in the direct disbursement to clients and complies with the ratio prescribed in Article 8a of the Circular No. 43/2016/TT-NHNN (amended and supplemented).

Question 42: At the time of online lending, the credit institutions require their clients to prove the fund use purpose by declaring, and after disbursement, post-lending control will be carried out, is it consistent with the Circular No. 06/2023/TT-NHNN?

Answer: Clause 2, Article 24 of the Circular No. 39/2016/TT-NHNN (amended and supplemented) stipulates that credit institutions have the right and obligation to inspect and supervise the loan use and repayment by clients in accordance with laws and the internal processes of credit institutions.

6. Transitional provisions

Question 43: Credit institutions and clients have signed a framework contract before September 1, 2023 but have not yet disbursed. If it is disbursed from September 1, 2023, is it required to apply the Circular No. 39/2016/TT-NHNN (amended and supplemented)?

Answer: According to the Circular No. 39/2016/TT-NHNN (amended and supplemented), in case the framework contract was signed before September 1, 2023 and has all the minimum contents prescribed in Article 23 (referred to as the loan agreement), the credit institution and the client continue to implement the contents of the signed loan agreement in accordance with laws in effect at the time of signing such loan agreement. In case the framework contract was signed before September 1, 2023 but does not have all the minimum contents defined in Article 23 of the Circular No. 39/2016/TT-NHNN (amended and supplemented), if it is disbursed from September 1, 2023, the debt receipt must be amended and supplemented in accordance with the Circular No. 39/2016/TT-NHNN (amended and supplemented).