State bank orders credit institutes not to force customers to buy insurance

SGGP
Each bank is required to review its banking system while giving tough penalties on those who require customers to buy insurance that is not really necessary when granting credit to customers, and approving loans to customers in accordance with regulations, according to the State Bank of Vietnam’s request.
State bank orders credit institutes not to force customers to buy insurance ảnh 1 State bank orders credit institutes not to force customers to buy insurance
The State Bank of Vietnam's branch in Ho Chi Minh City has just issued a written request to credit institutions and foreign bank branches citywide to comply with the direction of the State Bank of Vietnam regarding insurance business and insurance agents.
The State Bank of Vietnam’s branch in Ho Chi Minh City said that it had previously received complaints from associations and manufacturers that businesses were forced to buy insurance when applying for loans. This made the input costs of enterprises surge, causing difficulties in the context of increasing input costs and this is not in line with administrative reform of the banking sector.
Accordingly, the state bank has written requests to credit institutions in the city to continue to reform administrative procedures as well as digital transformation to help administrations faster and increase service convenience to reduce costs for customers.
According to the State Bank of Vietnam branch in Ho Chi Minh City, credit institutions should expand and develop services to facilitate stable lending interest rates and support businesses. In addition, credit institutions ought to continue to implement the Government’s preferential credit programs with interest rates as well as the municipal People's Committee’s direction on capital concentration for production and business.
In addition, this state bank branch also required credit institutions to strictly comply with regulations on interest rates, credit, and exchange rates, and strengthen internal inspection and control to ensure compliance with the banking sector’s regulations.
Particularly in the foreign exchange sector, the State Bank asked commercial banks to pay more attention to cross-border money transfers, foreign currency trading, payment and exchange at the end of the year.

By Nhung Nguyen – Translated by Anh Quan

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