Circular No. 17/2021/TT-NHNN Amending and supplementing certain Articles of Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card activities

CIRCULAR

Amending and supplementing certain articles of Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card activitiesVietnam regulates bank card activities

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to Decree No. 101/2012/NĐ-CP dated November 22, 2012 of the Government on non-cash payment; Decree No. 80/2016/NĐ-CP dated July 1, 2016 of the Government amending and supplementing certain articles of Decree No. 101/2012/NĐ-CP; Decree No. 16/2019/NĐ-CP dated February 1, 2019 of the Government amending and supplementing certain articles of decrees stipulating business conditions within the scope of management of the State Bank of Vietnam;

Pursuant to Decree No. 16/2017/NĐ-CP dated February 17, 2017 of the Government stipulating functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Payment Department Director;

The Governor of the State Bank of Vietnam issues this Circular amending and supplementing certain articles of Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card activities (hereinafter referred to as Circular No. 19/2016/TT-NHNN).On June 30, 2016, the Governor of the State Bank of Vietnam issued Circular No. 19/2016/TT-NHNN on bank card activities (hereinafter referred to as Circular No. 19/2016/TT-NHNN).

Article 1. Amending and supplementing certain articles of Circular No. 19/2016/TT-NHNN

1. Amending and supplementing Clause 12 of Article 3 as follows:

"12. The primary cardholder is an individual or organization named in the contract for issuing and using the card with the card issuer."

2. Supplement Clause 5 to Article 9 as follows:

"5. The card issuer must comply with the basic standard for domestic chip cards when issuing cards with BIN issued by the State Bank of Vietnam according to the transition schedule specified in Article 27b of this Circular. During the special control period, the card issuer shall implement the transition schedule according to the decision of the Governor of the State Bank of Vietnam for each specific case."

3. Amending and supplementing Clause 5 of Article 10 (amended and supplemented pursuant to Clause 3 of Article 1 of Circular No. 26/2017/TT-NHNN dated December 29, 2017 of the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circular No. 19/2016/TT-NHNN) as follows:

"5. Before concluding a contract for issuing and using the card with customers, the card issuer requires the primary cardholder to provide all necessary information and documents to identify the customer in accordance with the laws on anti-money laundering. In the case of issuing cards to foreigners, the card issuer requires customers to provide necessary documents to verify their duration of stay in Vietnam, including: passport, visa, certificate of visa exemption for entry, temporary residence certificate or temporary residence card or permanent residence card, labor contract or employment acceptance letter, or other documents proving the duration of stay in Vietnam. Necessary documents of customers when concluding a contract for issuing and using the card are original or certified copies with original for verification or electronic copies or certified copies or copies extracted from the original book according to the provisions of the law. For cases where the original is presented for verification, the card issuer must certify the copy and bear responsibility for the accuracy of the copy compared to the original. In the case of electronic copies, the card issuer must have solutions and technology to collect, check, and compare, ensuring that the electronic copy has complete and accurate content matching the original according to the provisions of the law."

4. Supplement Clause 10 to Article 10 as follows:

"10. The card issuer may issue debit cards, credit cards, and prepaid identified cards to individual primary cardholders through electronic means. The procedures for issuing individual cards through electronic means are carried out in accordance with the provisions of this article and Article 10a of this Circular."

5. Supplement Article 10a as follows:

"Article 10a. Issuing cards through electronic means

1. The Card Issuing Organization (TCPHT) must establish, promulgate, and publicly disclose procedures and processes for issuing individual cards through electronic means in accordance with the provisions of this Article, laws on anti-money laundering, laws on electronic transactions, and other relevant laws concerning customer information security and the safe operation of the TCPHT, including at least the following steps:

a) Collect necessary information and documents before concluding a card issuance and usage contract with customers to identify customers and determine transaction limits for debit cards, prepaid identified cards, and credit cards as stipulated in Clause 5 of Article 10, Clause 3 of this Article, Article 14 of this Circular, internal regulations of the TCPHT, and other applicable laws (if any);

b) Conduct checks, comparisons, and verification of customer identification information;

c) Inform customers about actions that are not allowed during the process of opening and using electronically issued cards;

d) Provide customers with the card issuance and usage contract according to the contents specified in Article 13 of this Circular and ensure compliance with electronic transaction laws when concluding the card issuance and usage contract with customers;

đ) Notify customers of the name of the TCPHT, the name or trademark of the card, the card number, the validity period (or the effective date) of the card, the cardholder's name, the scope and functions of the card usage, and prohibitions under the law when using the card;

2. The TCPHT may decide on measures, forms, and technologies to identify and verify customers for the purpose of issuing cards through electronic means; bear responsibility for any resulting risks (if any), and must meet the following minimum requirements:

a) Have solutions and technologies to collect, check, compare, and ensure the correct match between customer identification information and biometric data of the customer (which are biological factors closely linked to the customer for identification, difficult to forge, and have low matching rates such as fingerprints, facial features, iris patterns, voiceprints, and other biometric factors) with corresponding information and biometric factors on necessary documents for customer identification as required by laws on anti-money laundering, as required by the TCPHT, or with verified personal identification data from authorized state agencies or other foreign bank branches or organizations providing electronic identity verification services;

b) Have technical measures to confirm that the customer has agreed to the content of the card issuance and usage contract after being identified;

c) Establish management, control, and risk assessment procedures, including measures to prevent impersonation, interference, modification, and distortion of customer identification information verification before, during, and after card issuance to customers; measures to check and verify customer identification information to ensure that the customer conducting electronic card transactions is the primary cardholder. The management and risk control procedures must be regularly reviewed and improved based on updated information and data during service provision;

d) Store and preserve all detailed information and data related to customer identification during the card issuance and usage process, such as: customer identification information; customer biometric factors; audio, images, video recordings; transaction phone numbers; transaction logs. Information and data must be stored securely and confidentially, backed up, ensuring the completeness and integrity of the data to serve inspection, comparison, dispute resolution, complaints, and providing information upon request from competent state management authorities. Storage time must comply with the provisions of laws on anti-money laundering;

3. The TCPHT bases its risk assessment on the technology conditions applied in customer identification and verification to determine transaction limits for customers opening cards through electronic means as stipulated in Clause 2 of this Article but must ensure that the total transaction limit (including cash withdrawals, transfers, payments) of a debit card or a prepaid identified card or a credit card of a customer does not exceed 100 million Vietnamese dong in one month and does not allow cash withdrawals in foreign currency abroad or international payments;

4. The TCPHT may apply higher transaction limits for electronically issued cards than those prescribed in Clause 3 of this Article and allow cash withdrawals in foreign currency abroad and international payments if it implements one of the following measures:

a) The TCPHT applies technology to check and compare customer biometric characteristics with citizen biometric data through the national ID database;

b) The TCPHT applies video call solutions to collect, check, and verify customer identification information during the card issuance process to ensure effectiveness similar to face-to-face customer identification and verification procedures. Video call solutions must meet at least the following requirements: ensure safety and confidentiality; high resolution; continuous signal; real-time interaction with customers for true person recognition; store all audio, image, or video recording data during the card issuance process for customers;

c) After the TCPHT has completed customer identification and verification through direct face-to-face meetings with the primary cardholder who is an individual;

5. The issuance of cards through electronic means as provided in this Article does not apply to the subjects specified in Point b, Clause 1, Clause 2, and Clause 3 of Article 16 of this Circular. The TCPHT only issues cards through electronic means to individual foreign customers as stipulated in Clause 4 of Article 16 of this Circular for debit cards;

6. Credit issuance through credit cards and overdraft debit cards, in addition to complying with the provisions of this Article, must also be carried out in accordance with the provisions of Article 15 of this Circular.

6. Amend and supplement Point g Clause 1 Article 13 as follows:

"g. Agreement on credit provision to the cardholder, including: Credit limits and changes to credit limits, including overdraft limits (for debit cards) and credit limits; interest rates, methods for calculating interest on loans, order of repayment of principal and interest (for credit cards and overdraft debit cards); credit period, purpose of borrowing, repayment period, minimum repayment amount, repayment method, late payment fees (if applicable). The agreement on credit provision to the cardholder may be stated in the card issuance and usage contract or in a separate agreement;"

7. Amend and supplement Point b Clause 1 Article 15 as follows:

"b. Payment service providers must have internal regulations on credit provision through credit cards that comply with legal provisions on ensuring safety in credit provision activities, specifying the objects, credit limits, conditions, credit periods, repayment periods, restructuring repayment periods, minimum repayment amounts, interest rates applied, methods for calculating interest on loans, order of repayment of principal and interest, late payment fees, purposes of borrowing, review and decision-making procedures for credit provision through cards according to the principle of clearly defining responsibilities between the review and credit provision stages, measures to recover debts to ensure responsibility of departments within the payment service provider during the debt recovery process;"

8. Amend and supplement Clause 2 Article 16 (amended and supplemented pursuant to Clause 7 Article 1 of Circular No. 26/2017/TT-NHNN dated December 29, 2017 of the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circular No. 19/2016/TT-NHNN) as follows:

"2. For the main cardholder who is an organization: An organization meeting the conditions to open a settlement account may use a debit card. An organization established and operating legally under Vietnamese law may use a credit card or a prepaid named card. The cardholder who is an organization may authorize individuals in writing to use its card or allow individuals to use a supplementary card in accordance with this Circular;"

9. Amend and supplement Clause 1, Clause 2 Article 17 as follows:

"1. The cardholder must provide complete and accurate information required by the payment service provider when concluding the card issuance and usage contract and shall be responsible for the truthfulness of the information provided.
2. When using a credit card or an overdraft debit card, the cardholder must use funds for the intended purpose and fully and timely repay the payment service provider all loan amounts and interest generated from card usage according to the contract concluded with the payment service provider;"

10. Supplement Point e into Clause 3 Article 17 as follows:

"e. Debit cards, credit cards, and prepaid named cards issued electronically shall not withdraw foreign currency cash abroad or make international payments except as provided for in Clause 4 Article 10a of this Circular;"

11. Supplement Clause 4 into Article 17 as follows:

"4. Payment service providers and clearing organizations must take necessary measures to update, check, review, reconcile, and identify customers during the card usage process;"

12. Supplement Clause 1a into Article 22 as follows:

"1a. Clearing organizations must comply with the domestic chip card standard applicable to ATMs and acceptance devices at points of sale of clearing organizations according to the conversion schedule specified in Article 27a of this Circular. Clearing organizations under special control must implement the conversion schedule according to the decision of the Governor of the State Bank of Vietnam for each specific case;"

13. Supplement Clause 1a into Article 27 as follows:

"1a. Payment service providers, clearing organizations, and network service providers may refuse card transactions if there is suspicion regarding the truthfulness or purpose of the transaction according to legal provisions on preventing and combating money laundering;"

14. Amend and supplement Clause 3 Article 28 as follows:

"3. Payment service providers must submit their service fee schedules to the State Bank of Vietnam upon request for monitoring and supervision;"

15. Supplement Point d into Clause 1 Article 31 as follows:

"d) The focal point for coordinating related units to develop and submit to the Governor of the State Bank of Vietnam for issuance of decisions on the conversion schedule for domestic chip cards for each credit institution and foreign bank branch under special control;"

Article 2. Responsibility for Implementation

The Director of the Office, Heads of the Payment Department, Heads of units under the State Bank of Vietnam; credit institutions, foreign bank branches, card switching organizations, electronic transaction settlement organizations are responsible for organizing the implementation of this Circular.

Article 3. Implementation Provisions

1. This Circular takes effect from January 1, 2022.

2. Within six months from the date this Circular takes effect, payment service providers must take necessary measures to inform customers about new regulations related to the card issuance and usage contract as stipulated in Clause 6 Article 1 of this Circular through forms prescribed in the card issuance and usage contract, agreements with customers, and on the official website of the payment service provider. For contracts concluded before the effective date of this Circular and compliant with legal provisions at the time of conclusion, payment service providers must re-conclude the card issuance and usage contract or agreements with customers in compliance with this Circular when requested by customers.

3. This Circular abolishes Clause 2, Clause 3 Article 1 of Circular No. 41/2018/TT-NHNN dated December 28, 2018 of the Governor of the State Bank of Vietnam amending and supplementing Circular No. 19/2016/TT-NHNN and Clause 4 Article 1 of Circular No. 28/2019/TT-NHNN dated December 25, 2019 of the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circular No. 19/2016/TT-NHNN.