Vietnam readies for Open Banking revolution with new legal framework

The SBV is outlining a roadmap for the adoption of a legal framework to govern Open Banking.

This development came to light at a seminar on December 7, where Pham Anh Tuan, director of the Payment Department at SBV, provided insights into the anticipated regulatory timeline.

"We are on the cusp of a significant regulatory transition, awaiting the government's endorsement of a decree that will supersede Decree 101. This is a foundational step, paving the way for a series of essential circulars, notably one pertaining to Open API," said Tuan.

The existing Decree 101/2012/ND-CP, enacted on November 22, 2012, currently governs non-cash payment activities and is poised for an overhaul.

Tuan voiced optimism for the decree's enactment by December 2023, or early 2024 at the latest.

He emphasised the inclusive approach to the drafting process, stating, "We are committed to a consultative approach, engaging stakeholders across the business and financial spectrum to ensure a comprehensive and robust framework."

The regulatory shift is expected to culminate in the release of guiding circulars, slated to be effective from July 1, 2024. "These circulars will be the culmination of extensive research and refinement, marking a new era in our banking sector," Tuan added.

Delving into the specifics of data sharing standards, Doan Thanh Hai, deputy director of the IT Department at SBV, spoke of the delicate balance required in framing these standards.

"Our draft proposals, currently under review by credit institutions, aim to establish a common ground for connectivity and efficiency. We are crafting standards encompassing architecture, data, and security – all crucial pillars of Open Banking," Hai said.

He also highlighted, "Detailing standards is a nuanced task. Overly detailed regulations can stifle creativity, while overly broad ones risk creating market inconsistencies. Our approach is to start with high-level standards and refine them gradually. This phased approach is designed to provide banks with the breathing space needed for compliance."

With 2023 focused on finding a balance to move towards sustainable development, Vietnam’s mergers and acquisitions market is forecast to converge, ready for a new growth phase.

With the pace of economic activities on the mend and inflation rates already easing below the target level, the State Bank of Vietnam (SBV) will maintain its refinancing rate at the current level of 4.5 per cent to support economic recovery, the United Overseas Bank (UOB) said in a report.