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Banks face $24,000 fine for forex violations
Individuals and entities that break banking and monetary regulations could be fined up to VND500 million (US$24,200), seven times the current rate, according to a draft decree by the State Bank of Viet Nam (SBV).
The draft is being considered as a replacement to Government Decree 202/204/ND-CP issued in December 2004 regarding the penalties for violating banking and monetary regulations which lays out a maximum fine of up to VND70 million ($3,380) for each violation.
According to the draft, the maximum fines are expected to be applied to illegal foreign exchange activities, banking operations beyond the scope of the bank's licence and violations of capital adequacy ratios regulations.
Specifically, if individuals and entities illegally export or import foreign currencies and gold or trade gold outside officially sanctioned gold-trading floors, they will face fines from VND300 million ($14,400) to VND500 million ($24,200).
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Early withdrawals to earn lowest interest rate
According to Circular 04 issued by the State Bank of Viet Nam on Thursday, credit institutions are required to apply the lowest deposit interest rates for depositors who withdraw money prior to the maturity date.
The definition of deposits includes deposit certificates, promissory notes, treasury bills and bonds.
In the past months, commercial banks in need of capital applied flexible deposit interest rates which allowed depositors to receive full interest rates when withdrawing their money prior to the maturity date. As a result, the banks were under pressure to secure their capital due to possible withdrawals from customers who at any time could withdraw their savings in order to chase other banks offering higher interest rates. | Regarding foreign exchange activities, agents who were assigned to purchase foreign currency by commercial banks could be penalised from VND2 million ($96.6) to VND6 million ($29) if they do not post the selling and buying foreign currency prices against the Vietnamese dong.
The fines could be increased from VND15 million ($725) to VND 45 million ($2,173) if the forex rates posted or transacted failed to match SBV guidelines.
Individuals and entities who bring foreign currencies into Viet Nam exceeding the regulated levels will face fines of VND25 million ($1,200) to VND75 million ($3,623).
A penalty of VND50 million ($2,420) to VND100 million ($4,840) would be applied for opening and illegally using foreign currency accounts abroad, not selling foreign currencies collected to credit institutions or producing gold bars without a licence.
Meanwhile, the minimum fine will be raised from VND200,000 ($9.7) to VND500,000 ($24.2) for the late submission of reports.
According to the draft, SBV's inspectors are allowed to issue fines of up to VND500 million; central city and provincial inspectors, VND30 million; and commercial banking inspectors, VND500,000.
According to the SBV, as the country continues integrating into the global economy, the number of banking services and products have dramatically increased.
The Government and the SBV have promulgated numerous regulations to manage the banking and monetary market. However, the current regulations are unlikely to be strong enough to punish violations.
Decree 202 also requires amendment as it no longer matches several amendments of new laws which were ratified last year by the National Assembly including the Law on the State Bank of Viet Nam and the Law on Credit Institutions, effective since the beginning of this year.
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