Unofficial English translation

THE STATE BANK OF THE SOCIALIST REPUBLIC OF VIETNAM

VIETNAM Independence - Freedom - Happiness
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No. 18/2019/TT-NHNN Hanoi, November 04, 2019
CIRCULAR

ON AMENDMENTS TO THE CIRCULAR NO. 43/2016/TT-NHNN DATED DECEMBER 30, 2016

BY THE GOVERNOR OF THE STATE BANK OF VIETNAM ON CONSUMER LENDING BY
FINANCE COMPANIES

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

Pursuant to the Law on Credit Institutions dated June 16, 2010;

Pursuant to the Law on amendments to the Law on credit institutions dated November 20, 2017;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 defining the
functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to the Government’s Decree No. 39/2014/ND-CP dated May 07, 2014 on operations of
financial companies and finance lease companies;

Pursuant to the Government’s Decree No. 16/2019/ND-CP dated February 01, 2019 amending and
supplementing decrees on business conditions under the state management of the State Bank of Vietnam;

Upon the request of the Chief of Banking Inspection and Supervision Department;

The Governor of the State Bank of Vietnam promulgates a Circular on amendments to the Circular No.
43/2016/TT-NHNN dated December 30, 2016 by the Governor of the State Bank of Vietnam on consumer
lending by finance companies.

Article 1. Amendments to the Circular No. 43/2016/TT-NHNN dated December 30, 2016 by the
Governor of the State Bank of Vietnam on consumer lending by finance companies (hereby
referred to as Circular No. 43/2016/TT-NHNN)

1. Point b Clause 2 Article 3 is amended as follows:

“b) Demand of credit for payment of educational, medical examination, medical treatment, tourism,
cultural, sports and fitness activity costs.

2. Clause 5 Article 3 is amended as follows:

“5. Direct loan disbursement to customers is defined as a finance company disburses consumer lending
directly to customers in cash or through non-cash payment services in compliance with the agreement in
the consumer loan contracts, is bound to inspect, supervise lending purposes in accordance with law.”.

3. Article 4 is amended as follows:

 Unofficial English translation

“Article 4. Application of legal instruments

1. Since other lending provisions concerning consumer lending operations performed by finance
companies are not covered by this Circular, they shall carry out lending operations aimed at meeting
living demands in accordance with provisions of the State Bank on lending transactions by credit
institutions or foreign bank branches with customers.

2. Direct loan disbursement to customers is in accordance with provisions of this Circular.”.

4. Clause 2 Article 5 is amended as follows:

“2. Finance companies will be required to manage, supervise and make a statistical report of consumer
lending transactions which is separate from other lending transactions by finance companies, differentiate
between consumer lending which is directly disbursed to customers from other methods of consumer
lending disbursement.”.

5. Clause 4 Article 6 is amended as follows:

“4. Finance companies shall submit report to the State Bank in accordance with following provisions:

a) Once there is a change in the manager of the consumer credit counseling points, finance company shall
submit a report to the State Bank branches of cities or provinces where the points are located, in
accordance with following provisions:

- Methods of submitting and receiving the reports: Reports are in written form, submitted to the State
Bank branches of cities or provinces in one of the following forms: directly sent, sent via post service or
sent via email system of the State Bank branches of cities and provinces;

- Time-limit for submitting the reports: Within 05 (five) working days since the manager is changed;

- Outline of the report in accordance with Annex no. 01 issued together with this Circular.

b) In case of opening, ending or intending to open, intend to end operations of consumer credit counseling
points, finance companies shall submit reports to the Banking Inspection and Supervision Departments or
the State Bank branches of cities or provinces where these finance companies open, end, intend to open,
intend to end operations of their consumer credit counseling points in accordance with following
provisions:

- Methods of submitting and receiving the reports: Reports are in written form, submitted to the Banking
Inspection and Supervision Departments and the State Bank branches of cities or provinces in one of the
following forms: directly sent, sent via post service or sent via email system of the State Bank branches of
cities and provinces;

- Time period for data pegging: From the first day of the first month of reporting quarter to the last day of
the last month of reporting quarter.

- Time-limit for submitting the reports: Within the first 05 (five) working days of the month of the quarter
following the reporting quarter;
 Unofficial English translation

- Outline of the report sent to the Banking Inspection and Supervision Departments in accordance with
Annex no. 02 issued together with this Circular; outline of the report sent to the State Bank branches of
cities or provinces in accordance with Annex no. 03 issued together with this Circular.”.

6. Point a Clause 2 Article 7 is amended as follows:

“a) Loan eligibility criteria; rejected loan demands; lending methods; disbursement methods (including
methods of direct loan disbursement to customers); lending interest rate and method for calculating loan
interest rate; customer’s lending application dossiers and other submissions to finance companies which
are appropriate to loan features, types of loans and target customers; debt collection; conditions, processes
and procedures for debt rescheduling; debt delinquency;

“a) Điều kiện cho vay; các nhu cầu vốn không được cho vay; phương thức cho vay; phương thức giải
ngân (bao gồm cả phương thức giải ngân trực tiếp cho khách hàng); lãi suất cho vay và phương pháp tính
lãi tiền vay; hồ sơ cho vay và các tài liệu của khách hàng gửi công ty tài chính phù hợp với đặc điểm của
khoản vay, loại cho vay và đối tượng khách hàng; thu nợ; điều kiện, quy trình và thủ tục cơ cấu lại thời
hạn trả nợ; chuyển nợ quá hạn;”.

7. Point dd Clause 2 Article 7 is amended as follows:

“dd) Measures to urge and collect debts in accordance with customers' characteristics, the provisions of
law and excluding measures to threaten customers, in which the maximum number of debt reminding
times is 05 (five) times per day, form of debt reminding, time of debt reminding shall be agreed upon by
the parties in consumer loan contracts but must be between 7:00 am to 9:00 pm; do not remind debtors,
collect debts, send the information on debt collection of customers to organizations and individuals that
are not obliged to pay debts to financial companies, except for cases of requests of competent authority as
prescribed by law; to ensure the confidentiality of customer information in accordance with the law;”.

8. Point h Clause 2 Article 7 is amended as follows:

“h) Specialized departments and forms of receiving and processing, time limit for settling and answering
complaints, time limit for storing feedbacks or complaints of customers, organizations, individuals related
to consumer lending operations of finance companies;”.

9. Point m is added after Point l Clause 2 Article 7 as follows:

“m) Specified provisions on measures to control the direct loan disbursement to customers, ensure that
customers use loans for the right lending purposes stated in the consumer loan contracts.”.

10. Clause 4 Article 7 is amended as follows:

“4. Finance companies shall submit directly or submit via post services to the State Bank internal rules on
consumer lending in accordance with the following provisions:

a) Submitting to the Banking Inspection and Supervision Departments within 10 (ten) working days since
the date that the rules are newly issued or amended;
 Unofficial English translation

b) Submitting to the State Bank branches of cities or provinces where the headquarters, branches,
representative offices, consumer credit counseling points of the finance companies are located upon
request.”.

11. Article 8a is added after Article 8 as follows:

“Article 8a. Direct loan disbursement to customers

1. Direct loan disbursement to customers in cash shall comply with the provisions of the State Bank on
loan disbursement methods of credit institutions, foreign bank branches with customers, provided in
Clauses 3,4,5,6 of this Article and Article 7 of this Circular.

2. Direct loan disbursement to customers through non-cash payment services is themselves decided by
finance companies on the basis of information, documents, transfer confirmations provided by customers
and is bound to comply with the provisions in Clauses 3,4,5,6,7,8 of this Article, Article 7 of this Circular
and laws on non-cash payment.

3. Finance companies may only disburse loan directly to customers for those who do not have bad debts
according to the credit relationship report issued by Vietnam National Credit Information Center at the
closest time compared to the signing date of consumer loan contracts.

4. Total outstanding of consumer loan disbursed directly to customers at a finance company compared to
the total outstanding of consumer loan of that finance company at the end of the working day immediately
before the signing date of consumer loan contract directly disbursed to customers must comply with the
maximum rate according to the following schedule:

a) From January 1, 2021 to the end of December 31, 2021: 70%;

b) From January 1, 2022 to the end of December 31, 2022: 60%;

c) From January 1, 2023 to the end of December 31, 2023: 50%;

d) From January 1, 2024: 30%.

5. Total outstanding of consumer loan disbursed directly to customers and the total outstanding of
consumer loan of that financial company as specified in Clause 4 of this Article shall include all loan
directly disbursed to customers in the contracts already signed up to the date of contract signing specified
in Clause 4 of this Article but not yet disbursed.

6. Total outstanding consumer loan disbursed directly to customers at a finance company as specified in
Clauses 4 and 5 of this Article only includes customers having total outstanding consumer loan disbursed
directly [to them] (including the directly disbursed consumer loan amount as stated in contracts which
have already been signed up to the date of signing contracts specified in Clause 4 of this Article but not
disbursed yet) at such finance company more than VND20,000,000 (twenty million VND).

7. Finance companies must notify customers on legal regulations, internal regulations on methods of
direct disbursement to customers through non-cash payment services; notify customers and credit
institutions, foreign bank branches that are related to the direct disbursement to customers through non-
cash payment services on daily payment transaction hours.
 Unofficial English translation

8. Customers provide information, documents and transfer confirmation in compliance with the
regulations of the finance company for the consideration and decision of the method of direct
disbursement to customers through non-cash payment services. Customers are responsible before the law
for the accuracy and truthfulness of the information, documents and payment vouchers provided to the
financial company.

12. Clause 3 Article 9 is amended as follows:

Within 10 (ten) working days from the date of release or amendments of its consumer loan interest rate
range, the finance company shall submit directly or via post services to the Banking Inspection and
Supervision Departments and the State Bank branches of cities or provinces where the headquarters,
branches, representative offices, consumer credit counseling points of the finance companies are located
the report on consumer loan interest rate range in accordance with Annex no. 04 issued together with this
Circular.”.

13. Point l Clause 1 Article 10 is amended as follows:

“l) Actions to be taken to promote debt repayment and recovery which comply with the provisions in
Point dd Clause 2 Article 7 of this Circular, relevant laws and other regulations; measures to deal with
customers who do not perform their obligations stated in the consumer loan contracts;”.

14. Clause 4 Article 10 is amended as follows:

“4. The finance company shall provide a customer with a draft consumer loan contract for his/her review,
explain basic contents set out in a consumer loan contract in an accurate, sufficient and honest manner,
including rights and obligations of borrowing customer, actions to be taken to promote debt repayment
and recovery, measures to deal with customers who do not perform their obligations stated in the
consumer loan contracts and customers’ confirmation on being provided with information in accordance
with the provisions in this Clause, at a customer's request and decision made prior to signature.”.

15. Articles 10a, 10b is added after Article 10 as follows:

“Article 10a. Responsibilities of the finance companies

1. Complying with the provisions in this Circular and relevant laws and other regulations.

2. Making a public notice at their headquarters, branches, consumer credit counseling points and making
posts about following contents on their websites:

a) Consumer loan interest rate range, types of fee, methods of calculating loan interest;

b) Methods of receiving feedbacks, complaints of customers, organizations, individuals related to

consumer loan activities of the finance companies.

3. Posting contact information of the finance companies, list (name, address) of consumer credit
counseling points, things to know about consumer lending (including at least the basic rights and
obligations of borrowing consumer in accordance with the laws), frequent asked questions about
consumer lending on the websites of the finance companies.
 Unofficial English translation

4. Providing specifically the responsibilities of the manager of the consumer credit counseling points for
reporting, providing information, documents upon the requests of the State Bank branches of cities or
provinces where the points are located

5. Applying the methods of receiving feedbacks, complaints of customers, organizations, individuals

related to consumer loan activities of the finance companies in accordance with the law and other
regulations, ensuring authentication of complaint information provided by customers, organizations,
individuals to the finance companies, including at least following two methods:

a) Direct method via individuals, specialized departments at the headquarters, branches, consumer credit
counseling points of the finance companies;

b) Indirect method via documents, electronic sources, telephone exchange (including record, operates at
least from 7:00 am to 9:00 pm) and other indirect forms in conformity with law.

6. To handle and respond to the complaint of the consumers, relevant organizations and individuals in the
period of 48 hours (except for Saturday, Sunday and public holidays) from the time of receiving the
complaint regarding to the amount of loan money, interest rates, measures to urge and collect debts
provided in the consumer loan contract; to the claim of the money from individuals, organizations who do
not bear the debt payment obligation, wrong information of the debt payment obligation at National
Credit Information Centre of Vietnam within 07 (seven) business days from the day of receiving the
complaint of other contents.

7. To review, improve regularly the quality of the process recruitment, employee assessment, restriction
of ethics risk; organizing training for educating businesses, improving the quality of customer consultant
services, the sense of conforming law, internal provisions, business ethics for the employees.

8. To supervise, check, inspect regularly the conformity of law, the process, internal provisions relating to
the consumer loan activity for relevant individuals, sections, units at the headquarter, branches,
representative offices, service referral counters of the finance company, ensure the conformity of law,
internal process and internal procedure. Detect timely the activities having the signal of violation the law
in the consumer loan activity, notice, warn in the system of the finance company for further prevention,
risk restriction method from the violated activities.

9. To handle or co-ordinate with competent authorities to handle the cases of violation the law, internal
process, internal procedure of the consumer loan activities, to protect the legitimate rights of the
consumers, publish publicly the internal handling of those violations.

10. In case the finance company sell the debt for the third party permitted to buy the debt in accordance
with law, the sell debt contract shall contain the commitment of the third party relating to the provisions
agreed in the consumer loan contract (including measures to urge and collect debts) in accordance with
the provisions in this Circular and relevant law.

Article 10b. Responsibility of the units of the State Bank

1. The Banking Supervisory Agency shall be responsible for:

a) Supervising the finance company in implementing the provisions of this Circular;

 Unofficial English translation

b) Considering to handle within the their authority or submit the competent authorities to handle the
violation activities to ensure that the finance company conform with the provisions of this Circular and
relevant law;

c) Receiving the report in accordance with point b clause 4 Article 6, clause 4 Article 7 and clause 3
Article 9 of this Circular.

2. The provincial State Bank branch shall be responsible for:

a) Supervising or co-ordinating with the other provincial State Bank to supervise the activities of the
branches, representative offices, service referral counters in accordance with the law;

b) Considering to handle within the their authority or submit the competent authorities to handle the
violation activities to ensure that the finance company, its branches, its representative offices, its service
referral counters located in the region conform with the provisions of this Circular and relevant law;

c) Receiving the record prescribed at clause 4 of Article 6, clause 4 of Article 7 and clause 3 of this
Circular;

d) Co-ordinating with competent authorities to catch the information, notice, warn to the finance
companies, its branches, its representative offices and its service referral counters located in region to use
measures of prevention, risk restriction of violation activities, to ensure the legitimate of the interests of
consumers and finance company”.

16. Adding annex No. 01, 02, 03 and 04 promulgated together with this Circular.

Article 2. Organization of implementation

The Head of the Office, the Head of the BSA, heads of entities under the State Bank, directors of
provincial State Bank branches, and Chairmen of boards of management or members’ counsils and
general directors (directors) of finance companies are responsible to implement this Circular.

Article 3. Effectiveness

This Circular is of full force and effects as from 01 January 2020./.

PP. GOVERNER OF STATE BANK

Recipient: DEPUTY GOVERNER
- As Article 2 above;
- Governing body of SBV;
- GO;
- MOJ (for checking);
- Public announcement; Doan Thai Son
- Filing: VP, PC, TTGSNH6.
 Unofficial English translation

ANNEX NO. 01

(Promulgated together with Circular No. 18/2019/TT-NHNN dated 04 November 2019)

NAME OF THE FINANCE THE SOCIALIST REPUBLIC OF VIETNAM

COMPANY Independence - Freedom - Happiness
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No.: ___/___ ________, ____/____/______

REPORT ON SERVICE REFERRAL COUNTERS

Respectfully to: ________________Provincial State Bank

I. List (name, address) of service referral counters and the information of the manager, the person in
charge (name, address, telephone) of service referral counters operating in the region.

II. List (name, address) of service referral counters and the information of the manager, the person in
charge (name, address, telephone) of service referral counters changing the manager, person in charge in
the region.

ON AND BEHALF OF THE

FINANCE COMPANY
(Signature and Seal)
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ANNEX NO. 02

(Promulgated together with Circular No. 18/2019/TT-NHNN dated 04 November 2019)

NAME OF THE FINANCE THE SOCIALIST REPUBLIC OF VIETNAM

COMPANY Independence - Freedom - Happiness
---------------
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No: ___/___ ________, _____/_____/______

REPORT ON SERVICE REFERRAL COUNTERS OF QUARTER___ /_____

Respectfully to: The Banking Supervisory Agency

Report to the service referral counter in detail of the quarter in the province as follow:

1. The number of the opened, closed service referral counters.

2. The number of the being operated service referral counters.

3. The number of the service referral counters which are expected to be opened or closed.

ON AND BEHALF OF THE

FINANCE COMPANY
(Signature and Seal)
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ANNEX NO. 03

(Promulgated together with Circular No. 18/2019/TT-NHNN dated 04 November 2019)

NAME OF THE FINANCE THE SOCIALIST REPUBLIC OF VIETNAM

COMPANY Independence - Freedom - Happiness
---------------
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No: ___/___ ___________, ___/___/______

REPORT ON SERVICE REFERRAL COUNTER OF QUARTER___ YEAR ___

Respectfully to: State Bank - ______________Province/City

I. Report on service referral counters in this quarter of the region is presented as follow:

1. List (name, address) of service referral counters and the information of the manager, the person in
charge (name, address, telephone) of service referral counters opened or closed.

2. List (name, address) of service referral counters and the information of the manager, person in charge
(name, address, telephone) of service referral counters being operated.

II. List (name, address) of service referral counters which are expected to be opened or closed in the next
quarter in the region.

FOR AND ON BEHALF OF THE

FINANCE COMPANY
(Signature and Seal)
 Unofficial English translation

ANNEX NO. 04

(Promulgated together with Circular No. 18/2019/TT-NHNN dated 04 November 2019)

NAME OF THE FINANCE THE SOCIALIST REPUBLIC OF VIETNAM

COMPANY Independence - Freedom - Happiness
---------------
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No:__/___ ________, ___/___/_______

REPORT ON INTEREST RATES OF CONSUMER LOAN

Respectfully to: - The Banking Supervisory Agency;

- State Bank - ______________Province/City

I. Interest Rates: The highest interest rate, the lowest interest rate for each loan product.

II. Elements, basic principles of determining the interest rates of the consumer loan.

III. Elements relating to the capital fees, risk fees, profits on capital, market interest rates ensuring the
compensation of the relevant fees, risks, the legitimate rights of consumers and the development of the
finance company.

FOR AND ON BEHALF OF THE

FINANCE COMPANY
(Signature and Seal)