Banks may be fined 500 million VND if they force customers to buy insurance.

In the appraisal document of the draft Decree replacing Decree 88/2019 on administrative sanctions in the monetary and banking sector, a new regulation is stated as a fine of VND 400 million to VND 500 million for violations of attaching the sale of non-compulsory insurance products to the provision of banking products and services in any form as prescribed in the Law on Credit Institutions.

This penalty level is added to be compatible with the Law on Credit Institutions, which will take effect from the beginning of July 2024. Currently, banking regulations do not mention any form of insurance that is mandatory for borrowers.

This penalty also applies to violations of conducting banking activities without a license, illegally interfering with banking activities and other business activities of credit institutions and foreign bank branches, as well as performing acts of competition restriction or unfair competition that risk causing harm or damage to the implementation of national monetary policy and the safety of the credit institution system.

The draft also stipulates that violations of capital mobilization interest rates, service provision fees, business, and derivative product provision will be subject to a fine of VND10-20 million for failure to publicly post capital mobilization interest rates and service provision fees; posting unclear capital mobilization interest rates and service provision fees, causing confusion for customers; and collecting service provision fees that are not in accordance with regulations.

Banks may be fined 500 million VND if they force customers to buy insurance - 1

Banks can be fined from 400 million if they force customers to buy insurance (Photo: Manh Quan).

The draft decree also stipulates a fine of 20 to 40 million VND for acts of applying capital mobilization interest rates and service provision fees that are not at the listed levels.

In addition, there is a fine of 50 million to 100 million VND for violations of regulations on capital mobilization interest rates; trading and supplying derivative products on interest rates, currencies, commodity prices and other financial assets.

A fine of VND 150 million to VND 200 million is prescribed for the act of not establishing a risk management process, not classifying customers according to their risk level, or classifying customers according to their risk level not in accordance with the provisions of the Law on Anti-Money Laundering, the Law on Anti-Terrorism and the Law on Prevention and Combating the Proliferation of Weapons of Mass Destruction.

Source: https://dantri.com.vn/kinh-doanh/ngan-hang-co-the-bi-phat-500-trieu-dong-neu-ep-khach-mua-bao-hiem-20250715011449436.htm