Card interest soaring thousands of times over and billions of dong in bank deposits vanishing in an instant have exposed numerous gaps in banks’ risk management systems.

Commenting on recent incidents at several banks that have stirred public concern, economist Assoc. Prof. Dr. Nguyen Thuong Lang of the School of Trade and International Economics, NEU said that further bad precedents should not be set for depositor–bank relationships.

–Consumer protection regulations do not seem to cover banking transactions. Is that right?

The information clearly revealed in these incidents shows that customers’ rights have been seriously violated. Vietnam has a Law on Protection of Consumers’ Rights, but in practice, the law appears not to have been brought into play in these cases.

Interest rates have soared as much as 1,000-fold, exceeding even loan-sharking rates. This shows that the agreed contractual terms and commitments between customers and banks fall outside customers’ expectations.

Customers let their guard down because they could not imagine such enormous interest charges in an age when everything connected to online networks is becoming cheaper and technological advances bring substantial benefits to consumers.

Banks need to strengthen their risk management systems. Illustrative photo.

– What do the recent incidents at some banks reveal?

Clearly, customer service at some banks has not operated effectively on the principle of building good, friendly relationships between the two sides and genuinely treating customers as king. The guiding principle, or even philosophy, of protecting customers’ rights to nurture the customer base has not been put into practice in its true sense; customers’ trust has even been exploited.

Customers may be at fault for placing excessive trust in the modern, high-tech services they use. In particular, customers place great trust in banks’ business ethics. Yet instead of being respected as it should be, this trust has been undermined.

Economist Assoc. Prof. Dr. Nguyen Thuong Lang

When the parties cannot reach an agreement through negotiation and mediation, it shows that ethical values and business culture have not been applied. Public opinion and public views have not been brought to bear to protect customers’ interests. Banking regulators—bodies that consistently uphold the ideals and ethics of serving and protecting customers’ interests—as well as consumer protection associations need to intervene. Interest should perhaps be calculated at ordinary commercial bank rates.

Banks providing these services need to review their procedures, examine their customer service, and, in particular, reassess their systems for warning customers when interest rates rise exponentially. Customers must be warned when the method that produces the highest interest charges is used. Only then would the approach be ethical and friendly and prevent similar incidents. The most appropriate resolution in this case would be to apply deposit interest rates, even the lowest rate for demand deposits, to the customer. The customer would bear only a moderate loss, while the bank’s interests would not be entirely sacrificed.

– What should be done to prevent similar incidents?

Recent incidents show the need for an approach based on the principle of “harmonized interests and shared risks” to build good customer relationships, raise customer service to a new, more humane level, and strengthen trust in the banking system.

Only this can ensure sustainable banking operations, particularly by strengthening customer trust, maintaining banks’ reputations, ensuring that society respects the values of all parties, and avoiding unnecessary disruption to customer relationships or the creation of bad precedents.

–Thank you!

Link: https://kinhte.congthuong.vn/thay-gi-tu-nhung-vu-lum-xum-cua-ngan-hang-thoi-gian-gan-day-311916.html

This is an automated translation. If you notice any errors, please contact the Department of Communications, National Economics University at phongtruyenthong@neu.edu.vn.