On the morning of August 9, at the first non-scheduled session, the National Assembly discussed in the hall the draft Law amending and supplementing a number of articles of the Law on the State Bank of Vietnam, the Law on Anti-Money Laundering and the Law on Credit Institutions.
Preventing the use of credit relations to force investment product purchases
Regarding the amendment and supplementation of Article 114 of the Law on Credit Institutions, delegate Le Van The (Ninh Binh Delegation) said that if well designed, this could be a more professional solution in collateral management and contribute to strengthening investor confidence.
However, the delegate worried that if a bank is both a credit provider for businesses and manages bond collateral, and can also participate in distribution, payment or provide other services for the issuance, conflicts of interest may arise very clearly.
That is, when a business encounters financial difficulties, the benefit of recovering bank debt may not be completely consistent with the benefit of bondholders.
The most important point is to design a mechanism for commercial banks to carry out this activity independently, transparently and without abusing their position" - the delegate proposed.
From the above analysis, delegate Le Van The proposed that immediately after the Law is promulgated, the Government should specifically stipulate the conditions, scope and principles for implementing agency activities to manage secured assets; mechanisms for public identification and control of conflicts of interest. At the same time, stipulate the responsibility for managing the public disclosure of information about secured assets, separating dossiers, assets, data and monitoring and handling violations.
Delegate Le Van The also proposed that the Government and the State Bank, when detailing regulations, should pay special attention to preventing the use of credit relations to force or create pressure, and set conditions for customers to buy investment products.
The delegate believes that building the Law should also have early and remote prevention policies, and should not wait until violations occur to amend the law and sub-law documents. And the expansion of banking operations must go hand in hand with controlling conflicts of interest and protecting investors.
Request banks to clearly state their role in providing bond services
Delegate Tran Hoang Ngan, Ho Chi Minh City Delegation, agreed to supplement regulations allowing commercial banks and credit institutions to act as agents to manage collateral assets of bonds.
According to the delegate, although the regulation is short, it is meaningful for the process of restructuring the financial market, developing the capital market and reducing the economy's excessive dependence on bank credit.
However, from the issues that have arisen in the corporate bond market, the delegate proposed that banks must clearly explain to customers what is the issuing agent, what is the payment guarantee and what is the collateral management agent?
According to the delegate, it is necessary to clearly define each role so that investors do not confuse service provision activities with bank payment guarantee commitments.
