As provided in Government Decree No. 39/2014/ND-CP of May 7, providing operations of finance and financial leasing companies, a finance company’s operations include its banking operation; issuance of deposit certificates, promissory notes, bills or bonds to raise capital from organizations; borrowing of loans from domestic and overseas credit institutions and financial institutions; borrowing of loans from the State Bank of Vietnam (SBV) in the form of refinancing; provision of loans, including consumer loans and loans to be repaid in installments; provision of bank guarantee; issuance of credit cards; financial leasing and other operations.
Under the new regulation, general conditions for a finance company to conduct banking operations comprises: (i) banking operations of the finance company are reflected in the license granted by the SBV; (ii) it has adequate qualified staff and facilities, technologies, instruments and internal rules in compliance with law to conduct banking operations as defined its license; (iii) with regard to banking operations related to foreign exchange, it complies with the regulations on foreign exchange management; and (iv) it satisfies the professional requirements for banking operations prescribed by the SBV.
The new regulation also stipulates that financial leasing companies may conduct all operations specified in Articles 112 thru 116 of the Law on Credit Institutions and this new regulation.
In addition, the Decree stipulates in detail the rights and obligations of parties involved in financial leasing; termination of financial leasing contracts ahead of time; registration of financial leasing contracts; and certificates of ownership of leased assets.
This new regulation will take effect on June 25, 2014, and replace Decree No. 79/2002/ND-CP of October 4, 2002; Decree No. 81/2008/ND-CP of July 29, 2008; Decree No. 16/2001/ND-CP of May 2, 2001; Decree No. 65/2005/ND-CP of May 19, 2005; and Decree No. 95/2008/ND-CP of August 25, 2008.-