(NLDO) - If banks attach non-mandatory insurance products to the provision of products and services, they may be fined from 400 million to 500 million VND.
The State Bank is seeking comments on the draft Decree replacing Decree 88/2019/ND-CP regulating administrative sanctions for violations in the monetary and banking sector (amended and supplemented).
The Decree is reviewed, amended and supplemented to comply with current regulations such as the Law on Credit Institutions (amended) effective from July 1, 2024.
In particular, the regulation stipulates a fine of 400 million to 500 million VND if banks violate the regulation on linking non-compulsory insurance products with the provision of banking products and services in any form as prescribed in the Law on Credit Institutions.
This regulation, according to the State Bank, aims to supplement sanctions for violations of regulations in accordance with the Law on Credit Institutions 2024. The new sanctions of the banking industry were introduced after many borrowers reported being forced to "buy beer with peanuts", increasing borrowing costs.
The new draft decree imposes fines of VND400 million to VND500 million if banks violate regulations on linking non-compulsory insurance products to the provision of banking products and services in any form...
Most recently, voters in Khanh Hoa province reported to the State Bank that when people borrow capital from banks, especially commercial banks, they are still "forced" to buy insurance such as life insurance, health insurance, fire insurance, etc. before the loan can be disbursed.
According to a reporter from the Lao Dong Newspaper, some customers said that when borrowing money from a bank, "they cannot buy insurance". Sharing on the sidelines of a recent dialogue conference between banks and businesses in Ho Chi Minh City, a representative of a local industry association said that some member businesses in the association said that they were still asked to buy life insurance for loans.
"If you don't buy, you will often be made to suffer, your loan application will not be approved or will be very slow. So in the case that a business wants to disburse capital quickly, it will have to accept buying insurance. So is it "forced" or not "forced", it is very difficult" - this person wondered.
The State Bank has also repeatedly affirmed that current laws have provisions prohibiting the act of "forcing" customers to buy or sign insurance contracts.
Specifically, Clause 5, Article 9 of the Law on Insurance Business 2022 prohibits the act of "threatening or forcing the conclusion of insurance contracts"; Clause 5, Article 15 of the Law on Credit Institutions 2024 prohibits "credit institutions, foreign bank branches, managers, operators, and employees of credit institutions and foreign bank branches from linking the sale of non-compulsory insurance products to the provision of banking products and services in any form"...
Source: https://nld.com.vn/vi-sao-phai-phat-ngan-hang-neu-ep-khach-vay-tien-mua-bao-hiem-196241129070603167.htm
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