Early removal of obstacles for lending activities is the mutual goal of the participants in the Online Seminar “Practical implementation of Circular 39/2016/TT-NHNN regulating lending activities of credit institutions, foreign bank branches for customers” organized by the Vietnam Banks Association (VNBA) on 7/7/2021.
Speaking at the opening of the seminar, Mr. Nguyen Quoc Hung, General Secretary of VNBA, said that Circular 39 was issued in 2016. After more than 4 implementations, credit institutions have seriously implemented the State Bank’s regulations. Therefore, lending activities of credit institutions are safer, more transparent, and more efficient, meeting the increasing demand for loans that aim to expand the production and business activities of customers. However, facing the actual practice in reality regarding the development of the economy, the regulations on lending activities in Circular 39 have revealed obstacles and inadequacies that need to be examined and adjusted appropriately by the State Bank, based on the reflection of credit institutions.
According to Mr. Hung, Circular 39 is one of the most important issuances of the government which might become the backbone for all activities related to credit and business of the bank. Consequently, it is very crucial to remove obstacles for credit institutions as soon as possible.
Examine, research in detail about lending activities
In a more detailed report on the shortcomings in the implementation of Circular 39, Mr. Nguyen Thanh Long, Chairman of the Legal Club under VNBA, said that at the moment, credit institutions are gradually digitizing banking activities in a row. This is also a development orientation in line with the trend of the market, especially in the context of the current increasingly complicated COVID-19 epidemic. Meanwhile, the current law does not have regulations to guide and regulate this e-lending activity, leading to inconsistencies in the interpretation and applicability of the law.
With this situation, Mr. Nguyen Thanh Long said that comments from credit institutions members suggested the State Bank consider researching and promulgating specific legal corridors on lending activities using electronic methods in the following direction:
- Adding regulations to allow credit institutions to actively decide to apply credit appraisal and approval methods flexibly based on ensuring independence and safety factors.
- In which, allowing credit institutions to apply electronic credit appraisal and approval mechanism, automatic appraisal, and automatic approval by software system for small value loans, eKYC (electronic Know Your Customer) by credit customers via electronic channels or by credit institutions that collect/use information from an independent third party in the market as the basis for lending, disbursement, control, avoid duplication of an electronic file disbursed at many credit institutions.
- Specific instructions on signatures are specified in Article 32 of Circular 39 “Lending decisions are signed by competent persons” and Article 96 of the Law on Credit Institutions in the direction that the signature can be a direct signature or an electronic signature in accordance with the Law on Electronic Transactions.
A need to change the regulation to adapt to the real situation in the society
Through the comments at the seminar, Mr. Nguyen Quoc Hung assessed that the contributions of credit institutions are very specific, reflecting the problems that are happening on a daily and regular basis in the operation of credit institutions. VNBA, operating on the basis of protecting members’ interests in accordance with the law, will recommend the most suitable lending mechanism.
“VNBA wishes to have coordination with management agencies to promulgate mechanisms and policies that are most suitable for lending activities and ensure compliance with the law, harmonize the interests of credit institutions and the State, ensure the safety and security of credit institutions. After the seminar, VNBA will summarize the comments and send a report to the SBV to have a basis for reviewing and amending Circular 39 so that it is suitable and practical for the implementation in real life,” Mr. Nguyen. Quoc Hung expressed.