New regulations on credit cards to prevent frauds

Under a draft circular amending and supplementing Circular No 19/2016/TT-NHNN on bank card operation, for cash withdrawal at domestic card accepting units, each card holder can withdraw maximum VND5 million in one day.
For the withdrawal of cash by cards abroad, to limit the use of cash as foreign currency spent for improper purposes that are not permitted by the law, the draft stipulates that cash withdrawal transactions will be subject to a daily cap limit. A card holder can withdraw maximum amount of cash in foreign currency equivalent to VND30 million (US$1,300) per day for a withdrawal of foreign currency cash in a foreign country.

For cash withdrawal at domestic card accepting units, each card holder can withdraw maximum VND5 million in one day.

The draft also stipulates that in case of issuance of credit card with security assets, the credit limit granted to the cardholder shall not exceed 80 per cent of the value of the security assets, which is valued at a maximum of VND1 billion.
In case of credit card issuance without security assets, the credit limit granted to a cardholder is VND500 million.
These stipulations have no precedent, therefore credit institutions should review them carefully.
The draft also supplements regulations on the issuance of cards to foreigners to prevent the case where foreigners enter the country for a short period and then exit the country to carry out criminal activities by using the credit cards issued by institutions in Vietnam.
According to the central bank, the low daily cap limit, once set, will reduce the risk for credit card holders.
Trinh Thuong Thuc, Director of the Card Payment Department of the Vietcombank’s Ho Chi Minh City branch, said that international card organizations such as VISA and Master Card regulates that the cash withdrawal via POS must not be in excess of US$200 per day.
The central bank’s draft regulation therefore is in accordance with international rules, he said.
By the end of June 2017, the number of cards issued has reached over 121.5 million units. Thus, on average, each Vietnamese owns 1.3 bank cards for payment.
Vietnamese people have increasingly tended to make non-cash payment, a report from the State Bank of Vietnam (SBV) showed. Specifically, the proportion of cash on total means of payment of the economy has been gradually declining from 19.02 percent in 2005 to 14.02 percent in 2010, and to 11.49 percent in late 2016./.