The State Bank of Vietnam (SBV) has warned Vietnamese credit institutions and foreign banks in the country to be cautious before working with peer-to-peer (P2P) lending companies as there are many risks related to the service.
Vietnam hasn’t issued a law on P2P lending and the model has many potential risks. (Photo: thoibaonganhang.vn)
Hanoi (VNS/VNA)- The State Bank of Vietnam (SBV) has warned Vietnamese credit institutions andforeign banks in the country to be cautious before working with peer-to-peer(P2P) lending companies as there are many risks related to the service.
In a document sent tolenders this week, the SBV said the fourth Industrial Revolution has promotedthe development of many new products and services, including P2P lending, whichdirectly connects borrowers with lenders.
According to the centralbank, P2P lending can create a new capital supply channel andcontribute to promoting financial inclusion, but it also has many potentialrisks that have been experienced across the world.
“Vietnam hasn’t issued alaw on P2P lending while the model has many potential risks, such as taxevasion, money laundering, terrorist financing and theft of personalinformation, which may cause socio-economic instability,” the SBV noted.
Due to therisks, to ensure the safety of the banking system, the SBV asked creditinstitutions to research the lending model so as to be aware of risks thatmight arise.
The SBV noted, creditinstitutions must be especially cautious about signing and implementing agreementswith P2P lending companies to ensure they are in accordance with the law anddon't affect their operation and reputation, as well as the reputation andsafety of the entire banking system.
"Duringco-operation with P2P lending companies, credit institutions must require thecompanies to publicise accurate, transparent and honest information about theco-operation and transactional contents between the two sides,” the SBVstated in the document.
In addition, the centralbank also told credit institutions to monitor the publication of informationabout the co-operation to promptly disclose false or inaccurate informationthat may cause harm to consumers and related parties for proper handling.
The SBV said it wascarefully studying international models of P2P lending to develop a legalframework to manage the country’s nascent fintech sector.
SBV Deputy Governor NguyenKim Anh said a legal framework could bring out the positive aspects of thisservice, while minimising risks and ensuring safety for individuals andenterprises, thereby enhancing financial inclusion in Vietnam.-VNS/VNA
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Vietnam hasn’t issued a law on P2P lending and the model has many potential risks.
