Vietnam's market for credit information-related provision has been considered to be underdeveloped with little competition. (Photo: investopedia.com)Hanoi (VNS/VNA) - Private organisationswill be encouraged to provide credit information in Vietnam to improvetransparency in the credit information market, under a new draft decree.
The draft decree replacing Decree 10/2010/ND-CPwas opened for public comments by the State Bank of Vietnam (SBV).
Vietnam’s market for credit information isconsidered underdeveloped and lacks competition.
To date, only two companies are eligible toprovide credit information in Vietnam, including the Credit Information Centre(CIC) under the management of the central bank and Vietnam Credit InformationJoint Stock Company (PCB) – a joint venture founded by 11 local banks.
Demand for credit information is increasing,along with expansion of the financial market and the digital economy.
A total 42 banks, 27 finance and financialleasing companies, 51 branches of foreign banks and about 1,200 people’s creditfunds are operating and need credit information for service expansion.
In recent years, consumer lending has beendeveloping rapidly along with various types of loans, including asset leasingtransactions, installment and deferred payment.
In addition, the debt trading market isdeveloping to support the restructuring and handling of bad debts, whichalso requires reliable information.
Getting private firms involved is expected tohelp diversify sources of information, reduce service costs and increasetransparency in the market.
According to the draft, some organisations,which are not credit institutions or foreign banks’ branches, also have creditinformation of borrowers and want to provide or use this information. To meetthis demand, the draft would relax conditions for establishing creditinformation firms and entities allowed to receive credit information.
The draft proposes relaxing the restriction thata credit information company must have at least 20 commercial bankscommitted to providing it exclusive information.
Currently, 20 of Vietnam's 42 banks havenot committed to provide information, while the rest give theirs to thePCB.
The SBV hopes to have at least twomore credit information companies in the coming years.
According to Doan Thai Son, Deputy Governor ofthe SBV, to ensure customers’ interests and enhance the information access, thedraft has supplemented several conditions for establishment and management ofthe credit information companies.
Per the draft, the minimum charter capital of acredit information company would be doubled from 30 billion VND (1.3million USD) to 60 billion VND. The quality of the company’s management boardwill also be improved.
The draft also enhances the regulations oninformation security, saying that borrowers have to agree for their informationto be collected and passed on to credit information providers.
Son said all of these rules would be in harmonywith other laws including the Law on Credit Institutions, Civil Code Law,Enterprise Law and Consumer Protection Law.-VNS/VNA
The draft decree replacing Decree 10/2010/ND-CPwas opened for public comments by the State Bank of Vietnam (SBV).
Vietnam’s market for credit information isconsidered underdeveloped and lacks competition.
To date, only two companies are eligible toprovide credit information in Vietnam, including the Credit Information Centre(CIC) under the management of the central bank and Vietnam Credit InformationJoint Stock Company (PCB) – a joint venture founded by 11 local banks.
Demand for credit information is increasing,along with expansion of the financial market and the digital economy.
A total 42 banks, 27 finance and financialleasing companies, 51 branches of foreign banks and about 1,200 people’s creditfunds are operating and need credit information for service expansion.
In recent years, consumer lending has beendeveloping rapidly along with various types of loans, including asset leasingtransactions, installment and deferred payment.
In addition, the debt trading market isdeveloping to support the restructuring and handling of bad debts, whichalso requires reliable information.
Getting private firms involved is expected tohelp diversify sources of information, reduce service costs and increasetransparency in the market.
According to the draft, some organisations,which are not credit institutions or foreign banks’ branches, also have creditinformation of borrowers and want to provide or use this information. To meetthis demand, the draft would relax conditions for establishing creditinformation firms and entities allowed to receive credit information.
The draft proposes relaxing the restriction thata credit information company must have at least 20 commercial bankscommitted to providing it exclusive information.
Currently, 20 of Vietnam's 42 banks havenot committed to provide information, while the rest give theirs to thePCB.
The SBV hopes to have at least twomore credit information companies in the coming years.
According to Doan Thai Son, Deputy Governor ofthe SBV, to ensure customers’ interests and enhance the information access, thedraft has supplemented several conditions for establishment and management ofthe credit information companies.
Per the draft, the minimum charter capital of acredit information company would be doubled from 30 billion VND (1.3million USD) to 60 billion VND. The quality of the company’s management boardwill also be improved.
The draft also enhances the regulations oninformation security, saying that borrowers have to agree for their informationto be collected and passed on to credit information providers.
Son said all of these rules would be in harmonywith other laws including the Law on Credit Institutions, Civil Code Law,Enterprise Law and Consumer Protection Law.-VNS/VNA
VNA
