On May 07, 2014, the Government issued the Decree No. 39/2014/ND-CP on operation of financial company and financial leasing company.
Within that, the banking operation of financial company must be specified in the establishment and operation Permit issued by the State Bank.
Have qualified staff with professional capacity, material facilities, technology, means, equipment and internal regulations as provided for by law for the implementation of banking operation specified in the Permit.
For banking operations related to the foreign exchange, the financial company must comply with regulations of law on management of foreign exchange and fulfill the operational conditions for banking operation stipulated by the State Bank.
Beside above conditions, on carrying out factoring activities, the financial companies must fulfill the conditions as having internal regulations on process, order and principles to recognize customers for close supervision to ensure the prevention of abuse for the purpose of money laundering, terrorist financing and other crimes.
When financial company established and operating before the effective date of this Decree may add the factoring activities upon fulfillment of conditions as business activities with profit at least in the year preceding the year proposed for additional operation.
Having a minimum time of operation and plan for factoring activities as stipulated by the State Bank complying with regulations on prudential ratios in banking operation, debt classification and continuous appropriation of risks in all quarters of the year preceding the year proposed for additional operation; non-performing loan below the level specified by the State Bank; and not being sanctioned for administrative violations in the field of money and banking within 01 year from the time of request for additional operation backwards.
Financial company is entitled to issue certificates of deposit, bonds, treasury bills and bonds to raise funds from when minimum time of operation, results of operation and business provided for by the State Bank and the issue plan of long-term valuable papers must be adopted by the General Meeting of Shareholders or the Board of Directors, Board of members under the regulations of law.
The financial company that may get a loan from credit institutions and financial institutions in the country and abroad do not subject to the cases where the State Bank applies restrictive measures, suspension, temporary suspension of the implementation of borrowing activities on the inter-bank market without overdue debts at credit institutions, branches of foreign bank as provided for by the State Bank.
This Decree takes effect on June 25, 2014.
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