Compulsory e-signature might be cost burden: banking association

The E-signature should not be made compulsory but optional, according to the Vietnam Banking Association. (File Photo)

Hanoi - The Vietnam Banking Association has sent a document to the Ministry of Information and Communications with regard to the draft decree on electronic signatures, saying that if they are made compulsory in banking transactions, it might become a cost burden to both users and enterprises.

Under the draft decree on e-signatures, detailing several points of the Law on e-Transactions 2023, individuals and enterprises must buy e-signatures from organisations providing e-signature services for online transactions with credit institutions.

This will be a cost burden on individuals and enterprises, the association said, adding that they estimate that the cost might amount up to trillions of VND per year for each bank, which is not feasible in the current economic climate.

Currently, 80% of Vietnamese adults have bank accounts and more than 95% of banking transactions are handled digitally.

Under the draft, major services of credit institutions such as receiving savings, credits and foreign currency transactions all require e-signatures for transactions.

The annual fee for purchasing an e-signature is averaging around 800,000 VND per year or 2,500 VND per signature.

The association cited statistics of a State-owned commercial bank that with 12 million customers and 6.5-7 million transactions per day or 500 transactions per second, the certificate authority (CA) services might cost around 6.6 trillion VND – 21.6 trillion VND per year (260 million USD – 850 million USD).

This will amount to a huge sum for the entire credit system, a heavy cost burden on citizens and enterprises, the association said.

The dependence on few CA providers also implies risk, the association said.

The association is worried about the information security and the system capacity to ensure smooth operation for huge number of transactions per second.

The association said that while it should be necessary that every citizen has an e-signature for public and business transactions, consideration needs to be given for timing, with regard to technological infrastructure and when people can adapt to the new system.

At the moment, e-signature should not be made compulsory but optional.

Installing a robust e-signature model Pandemic difficulties have demonstrated the shortcomings of traditional methods for entering and executing contracts and other legal documents. Associate Dang Hoan My and legal assistant Truong Cong Thanh from law firm Indochine Counsel address some of the issues currently facing electronic signatures under Vietnamese laws.