Banks can be fined from 400 million VND if they force customers to buy insurance.

Credit institutions violating regulations on linking the sale of non-compulsory insurance products with the provision of banking products and services may be fined up to VND500 million.

The State Bank is drafting Decree 88 on administrative sanctions for violations in the monetary and banking sector.

Accordingly, the State Bank stipulates a fine of between VND400 million and VND500 million if banks attach non-compulsory insurance products to the provision of banking products and services in any form.

This penalty level was added to be compatible with the Law on Credit Institutions, which took effect from the beginning of July this year. Currently, banking regulations do not mention any form of insurance that is mandatory for borrowers.

Circular 67 guiding the Law on Insurance Business, issued by the Ministry of Finance at the end of last year, prohibits banks from selling investment-linked insurance (a type of life insurance product) within 60 days before and after the date of disbursement of the entire loan. Other types of insurance such as loan, fire, death, mixed insurance, etc. are not mentioned by the Ministry of Finance in this Circular.

The new sanctions of the banking industry were introduced after a series of complaints from people who said they were forced to buy life insurance when borrowing money over the past time. Many borrowers agreed to buy life insurance (a high-value insurance product that requires long-term payments) as an "unspoken rule" to get the loan disbursed.

In addition to life insurance, banks often sell loan insurance, fire insurance... with lower value when disbursing loans. These are non-compulsory insurance products, offered by banks to ensure the safety of assets and loans. Buying loan insurance or fire insurance according to banks, helps increase the ability to approve mortgage loan applications, protect collateral assets...

TH (according to VnExpress)

Source: https://baohaiduong.vn/ngan-hang-co-the-bi-phat-tu-400-trieu-dong-neu-ep-khach-mua-bao-hiem-399124.html