Bank loans under 400 million VND will not require financial proof

The State Bank has just issued Circular 29 amending and supplementing many regulations on lending activities of credit institutions, effective from August 15.

Small value loans are being defined as no more than 100 million VND, according to new regulations, will be increased to 400 million VND or less when borrowing from credit institutions and 200 million when borrowing from people’s credit funds.

The increase in the small value consumer loan limit according to the State Bank is to suit the current economic context.

With these small value loans, the Law on Credit Institutions allows banks and financial companies… to disburse funds without requiring borrowers to provide documents and data proving financial capacity or feasible capital use plans like other loans.

In addition, the new Circular requires that for overdue debts, credit institutions must collect principal first, then collect interest. Previously, the parties had the right to agree on the order of principal and interest collection.

As for lending activities by electronic means, credit institutions must stipulate outstanding debt limits for each customer and identify and verify customers according to the State Bank’s regulations on opening and using payment accounts. For customers who already have transactional relationships, credit institutions can proactively apply appropriate verification measures and technologies to manage risks.