Beginning January 1, 2025, new regulations imposed by the State Bank of Vietnam will significantly alter the operational protocols for bank card transactions within the country. This move aims to bolster security and compliance amid rising concerns about financial fraud and cybercrime.
The recent issuance of Circular 18/2024/TT-NHNN emphasizes the importance of maintaining updated documentation and implementing biometric verification for all customers wishing to continue their banking transactions. According to the State Bank of Vietnam, "From January 1, 2025, customers must update their personal documents to continue transactions." Failure to comply will result in account restrictions and the potential freezing of bank cards.
Particularly, any documents such as national ID cards, passports, or citizen identity cards must be valid and accurately reflected within the banking systems. Notably, as per the new legislation, all old-style identity cards will become obsolete due to recent legislative changes, necessitating immediate updates from users to avoid interruption of their banking services.
Another significant regulation pertains to corporations, illustrated by the recent situation involving TNG, where the company faced penalties for not adhering to stipulations laid out under Vietnam's corporate governance laws. TNG was mandated to dismiss its CEO, Nguyen Duc Manh, due to his familial ties to the Chairman, Nguyen Van Thoi, which contravenes specified regulations within the corporate framework. The penalization amounting to 25 million VND is but one step following the company’s non-compliance. "TNG will be forced to dismiss Mr. Nguyễn Đức Mạnh from his CEO position due to non-compliance with legal statutes," reported Thanh tra Sở Kế hoạch và Đầu tư Thái Nguyên.
These developments come as the Vietnamese government is pressing for improved frameworks around debt regulation and risk management, especially as articulated in the proposed amendments to Decree 155/2020/ND-CP. The Vietnam Chamber of Commerce and Industry (VCCI) has raised concerns about the blurred lines concerning what constitutes 'debt' for companies, arguing the necessity for precise definitions to prevent the misinterpretation of liabilities and aid enterprises during financial assessments. "It is necessary for the drafting authorities to clarify the liability definitions to prevent misinterpretation among enterprises," the VCCI stated, highlighting the pivotal role clear guidelines play for business sustainability.
The revisions aim to define debts more closely, primarily focusing on loans as opposed to overall liabilities, which incorporate various non-loan obligations such as receivables from prepaid sales and other reserve funds. This clarity is expected to help stabilize the financial environment amid fluctuability.
Under the revised regulations, businesses involved particularly with complex financial structures, such as those dealing with real estate, could see their borrowing capacities adjusted. For example, projects influencing properties larger than 20 hectares are allowed to apply for higher debt ratios, with figures potentially reaching up to 5.67 times their equity. Such leniency may encourage more significant investments but also carries risks inherent to high-leverage financing.
Both businesses and financial institutions are being urged to gear up for these changes, with transitions expected to create adjustments to existing practices and consumer interactions. With deadlines looming, banks across the nation are proactively encouraging their clientele to engage with these updated requirements, indicating the expansive governance this combination of technology and regulation could spur within the banking sector.
The ramifications of these consolidations of laws are broad, impacting numerous sectors and verticals operating within the nation's economy. Companies must navigate the adjustments to their corporate governance and compliance mechanisms as new protocol becomes standard. The intersection of technology with regulatory alignment signals the future approach to financial management and ensures heightened industry scrutiny.
Moving forward, the emphasis will be squarely on ensuring transparency and integrity within Vietnam’s financial sector, as both regulatory bodies and enterprises alike adapt to these sweeping reforms. The implementation of stringent verification methods aligns with global security standards, and more significantly, aims to protect the integrity of financial transactions across the board.
The upcoming year will set the stage for Vietnam's banking and corporate compliance to evolve rapidly, reflecting the government's steadfast commitment to securing both consumer protection and economic stability, underscoring the importance of mindful adherence to these transformative changes.