eKYC implementation
Opening bank accounts

In late 2020 the State Bank of Vietnam (SBV) issued Circular 16/2020/TT-NHNN (Circular 16), which amends Circular 23/2014/TT-NHNN (Circular 23) and provides guidance on the opening and use of payment accounts at payment service providers. It is one of the most prominent legal documents issued to promote the transformation and development of cashless payments.

eKYC implementation

In addition to several notable changes relating to opening bank accounts, one long-awaited reform via Circular 16 is the detailed regulation on opening individual payment accounts at credit institutions by electronic know-your-customer (eKYC). Circular 16 is the first legal instrument that provides detailed guidance on eKYC's implementation.

The eKYC system is used to verify a customer's identity against their declared information in compliance with applicable laws and regulations, with support from video call and AI technologies such as face-matching for photos on an ID card or optical-character recognition to read and extract information. Such technology instantly compares personal information with a centralised database of user identities. Thus, opening bank accounts and onboarding customers is much easier, as customers need not go to a branch.

Previously, under Decree 116/2013/ND-CP, which provides guidance relating to the Law on Anti-money Laundering and the aforementioned Circular 23, the first meeting between the bank and client must be face-to-face if the latter wishes to open a bank account. However, in November 2019, reflecting the development of 4.0 technology, the government issued Decree 87/2019/ND-CP, which provides details about the implementation of several articles of the Law on Anti-money Laundering. Decree 87 amends article 8(2) of the Law on Anti-money Laundering to state that the bank can "decide whether to meet the client in person when the relationship is first established".

These developments are now mirrored in Circular 16, thereby allowing commercial banks to decide whether to meet clients in person when the latter wishes to open a bank account. Banks may now also decide which methods, forms and technologies it wishes to use to identify and verify a client.

However, the SBV also requires banks to adopt necessary technologies and procedures for risk management and adequately store and manage the information and data used for identifying clients. Regarding transaction limits, except for some cases where banks are allowed to apply a higher transaction limit, transactions made from an electronically opened account must not exceed D100 million ($4,350) per month per customer in aggregate.

Opening bank accounts

In addition to important regulations on eKYC, Circular 16 also provides several notable changes relating to the opening of bank accounts.

Circular 16 clarifies that a legal entity can represent a person to open a checking account. In such cases, documents that can be used to identify such legal entities must be included in the application to open a checking account.

Further, a bank or foreign bank branch is now allowed to stipulate the components of the application dossier and prescribe the application form for opening a shared checking account. The bank or foreign bank branch is also entitled to agree with its client on whether foreign language documents included in the application must be translated into Vietnamese. This is a completely new addition to Circular 23.

Circular 16 also supplements the regulations on the use of standard form contracts on opening and use of checking accounts. Accordingly, if the bank or foreign bank branch in question uses a standard form contract for the opening and use of checking accounts, it must make the standard form contract publicly available on its website, mobile banking app (if applicable) and its lawful transaction locations.


In light of the above, international and domestic banks in Vietnam are gearing up to boost their eKYC processes to provide customers with a seamless on-boarding experience and reduce paper-based procedures. Indeed, several commercial banks (eg, HDBank, TPBank, VPBank and Sacombank) have applied eKYC to open accounts for customers.

Digital banking and non-cash payment are among the goals that the Vietnamese legislature is aiming for in the near future. In the first six months of 2020, non-cash payments increased by 180%. This trend necessitates the completion of a sound legal framework. In this context, Circular 16 – with the regulation on eKYC – could be considered an important premise for development of digital payment and banking in Vietnam.

Having taken effect as of 5 March 2021, Circular 16 is expected to provide a legal platform for this, as well as paving the way for more foreign credit institutions, banks and tech companies on eKYC to enter and develop the Vietnamese market.

For further information on this topic please contact Thanh Minh Vu at LNT & Partners by telephone (+84 28 3821 2357) or email ([email protected]). The LNT & Partners website can be accessed at www.lntpartners.com.