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Since the SCB-Van Thinh Phat case, the State Bank has banned banks from forcing employees to sell bonds

After the arrest of Ms. Truong My Lan and the accusations of bondholder Van Thinh Phat with An Dong bonds issued through the consulting and brokerage of SCB Bank-Tri Viet Securities (TVSI), the Vietnamese bond market The South still faces many difficulties.

In the latest move, the State Bank (SBV) has asked banks not to force employees to sell bonds and put pressure on employees to sell bonds to evaluate work performance (KPI).

Handling violations in insurance agency activities

The State Bank has just responded to a petition from Ho Chi Minh City voters on solutions to ensure customers' rights when depositing savings, buying bonds, buying insurance... are at risk.

Responding to voters, the State Bank (SBV) said that regarding savings deposits, on December 31, 2018, the SBV issued Circular 48/2018/TT-NHNN regulating savings deposits replace the previous Savings Deposit Regulations in the direction of ensuring deposit safety for depositors.

In particular, the operator requested credit institutions (CIs) to add regulations for depositors to look up savings deposits and notify depositors when there are changes to savings deposits. Develop internal regulations clearly defining the responsibilities and obligations of each department and individual related to implementing savings deposit transactions.

Detailed regulations on procedures for receiving and paying savings deposits at credit institutions' transaction locations; publicly post at the transaction location of the credit institution the savings deposit transaction procedures between the credit institution and the depositor and each form of savings deposit.

According to the State Bank, through television programs such as "Smart Money, Smart Money"; "Key chest Handle"; column "Wise Currency,"... The State Bank has propagated, disseminated, and educated the law in a simple, understandable and memorable way so that people can better understand the deposit procedures and the procedures for depositing money information related to savings deposits to ensure the safety of depositors' assets.

In addition, to protect the rights and interests of depositors, savings deposits are also insured according to the Law on Deposit Insurance provisions.

Regarding insurance, according to the State Bank, over the past time, this agency has continuously issued documents to direct, warn, and correct credit institutions to comply with the law on insurance agency activities, contributing to ensuring customers' legitimate rights. At the same time, organize an industry-wide online conference to familiarize credit institutions with insurance agency activities thoroughly.

Along with directing credit institutions to strengthen internal inspection and control activities to detect and promptly handle violations in insurance agency activities, especially the act of consulting, attaching the purchase of Optional insurance products for the provision of banking products and services, the State Bank has strengthened the inspection, examination and supervision of insurance business activities, insurance agents of credit institutions and supplemented contents of inspection of the observance of the provisions of law and the direction of the SBV for insurance business and insurance agents in the annual inspection plan.

The State Bank has established a hotline to receive and process feedback and recommendations from people, agencies and businesses related to insurance agency activities of credit institutions. Closely coordinate with the Ministry of Finance during the inspection process of insurance businesses and credit institutions with feedback and recommendations related to insurance agency activities to promptly correct and handle law violations.

Also read: Ministry of Finance regulates insurance companies » Vietnam News - Latest Updates and World Insights |

Tightening action of the State Bank

Regarding bonds, the State Bank said that in recent times, this agency has increased supervision of the provision of services related to corporate bonds by credit institutions.

The State Bank has also issued documents directing, warning, and correcting credit institutions regarding consulting, introducing, and providing information on corporate bonds.

Previously, as Sputnik reported, the State Bank of Vietnam has just issued document 2845/NHNN-TTGSNH to credit institutions on reviewing and correcting consulting, introducing, and providing information on corporate bonds and certificates funds of credit institutions (CIs).

In particular, the State Bank of Vietnam requires commercial banks not to pressure employees to sell corporate bonds to customers/investors and not to force employees to sell bonds to achieve performance evaluation targets ( KPI).

In the new move, the State Bank has also requested credit institutions to proactively review, amend, supplement or promulgate new internal regulations, business processes, and contract templates... for consulting, introduction, and information provision of corporate vouchers and fund certificates.

The operator requires that banks, when providing services, must ensure that customers and investors clearly understand the difference between investing in corporate bonds or fund certificates and depositing savings at banks, and the risks arising, issues that need to be kept in mind when investing, especially the risk of not being able to pay interest and principal of bonds of the issuing enterprise, rights and responsibilities of customers and investors; responsibilities of relevant agencies and organizations.

In addition, credit institutions must also strengthen internal inspection and control at branches and head offices for consulting, introducing and providing information on corporate vouchers fund certificates of credit institutions...

Strengthen inspection of bond consulting.

In particular, this year, the State Bank has also added the inspection of consulting, introduction and provision of corporate voucher information for customers to the annual inspection plan.

In the coming time, the State Bank said it would continue strengthening the inspection and supervision of insurance business activities, insurance agents and consulting, introducing and providing corporate bond information for credit institution customers.

Previously, the State Bank also required credit institutions to strengthen internal inspection and control for activities providing corporate bonds and fund certificates to detect, prevent and handle transactions promptly. Strictly handle cases such as providing incomplete, unclear, or inaccurate information leading to customers misunderstanding corporate bonds and between purchasing corporate bonds and fund certificates and depositing money at credit institutions or not complying with internal regulations, professional processes and directions of the State Bank and relevant laws; direct or "force" customers to buy corporate bonds and fund certificates.

The State Bank requires credit institutions to direct units in the system to review and promptly take measures to resolve complaints, denunciations, and disputes related to consulting, introduction, and supply activities. Providing information on corporate bonds and fund certificates of credit institutions as well as responsibilities of credit institutions to customers and investors under contracts (if any).

Also read: Corporate bond issuers allowed extending maturity period by 2 years » Vietnam News - Latest Updates and World Insights |

Note ethical issues

The issue of business ethics is particularly emphasized. The State Bank of Vietnam requires bank leaders to promote dissemination and internal communication so that employees and officials can clearly understand internal regulations, business processes, instructions of the State Bank and relevant laws related to consulting, introducing, and providing information on corporate bonds and fund certificates to increase compliance awareness and minimize ethical risks during implementation.

Recently, many Vietnamese banks have been busy re-issuing bonds. This is a welcome move after a long period of stagnation and difficulties in the bond market after many bondholders of An Dong bonds filed complaints about being given vague and unclear advice by SCB bank staff on bond products related to Van Thinh Phat Group of Ms. Truong My Lan.

Statistics from the Hanoi Stock Exchange (HNX) show that in August alone, 10 bond issuances by banks were recorded with an issuance value of up to thousands of billions of dong.

In particular, ACB has 3 issuances with a total value of 6,500 billion VND, HDBank has approved a plan to issue to the public a maximum of 5,000 billion VND in bonds, OCB issued bonds with a total value of 2,000 billion VND, MSB more than 1,000 billion VND, BacABank 800 billion VND, BIDV 700 billion VND…

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