Hanoi (VNS/VNA) - Vietnamneeds a proper legal framework for financial technology (fintech) services, aState Bank of Vietnam (SBV) official said on August 20.

Ngo Van Duc, Deputy Director ofPayment Method Supervision at the State Bank of Vietnam, said there was no lawor regulation on the management of fintech businesses and their services.

The development of fintechbusinesses had not met expectations in recent years, he said.

According to the SBV, there arenow about 150 active fintech firms – most of which focus on payment methods –and 30 companies that are licensed by SBV and operate as payment middlemen.

Fintech businesses are also inother fields such as bank lending, electronic confirmation, blockchainapplications and individual financial services.

Therefore, a fintech law must beprovided to protect the rights and benefits of both service suppliers andcustomers, Duc added.

Fintech helped ease financial andmonetary transactions, making them more convenient, more accurate and faster.But it also means fintech firms may find opportunities to carry out illegalactivities.

Regulations often tighten theoperation of fintech firms, not foster the conditions for them to function,said lawyer Phung Anh Tuan, deputy chairman and general secretary of theVietnam Association of Financial Investors (VAFI).

Two decrees were issued by theGovernment in July 2016 and February 2019 to replace Decree 101/2012/ND-CPregulating cashless payment. The two decrees cap the limit of foreign ownershipin local fintech firms at 30 percent of 49 percent.

Meanwhile, maximum purchase of apersonal e-wallet is 20 million VND each day and 100 million VND each monthwhile that of an institutional e-wallet is 100 million VND each day and 500million VND each month. Each person can only use one e-wallet provided by thefintech firm.

“Fintech companies need foreigncapital to develop further, invest more in technology, marketing and human resources.The limit of foreign capital inflow may hinder their growth,” Tuan said.

Duc said the central bank hadalmost completed the policy on piloting a regulatory sandbox – in whichgovernment agencies and businesses are free to experiment with new ideas – andit would submit the plan to the Prime Minister for approval.

The policy aimed to create asuitable environment for businesses to test their products and services andmeet market demand, he said.

In 2019-20, the central bankwould continue improving its payment-related policies, especially electronicpayment, and create a test management mechanism for fintech firms after itsregulatory sandbox policy was passed.-VNS/VNA