Can a financial company carry out all banking operations? Are financial companies in Vietnam allowed to issue credit cards?
Can a financial company carry out all banking operations?
According to the provisions of Article 108 of the 2010 Law on Credit Institutions in Vietnam as follows:
Banking operations of finance companies
1. Finance companies may conduct one or some banking operations below:
a/ Taking deposits of organizations;
b/ Issuing deposit certificates, promissory notes, bills or bonds to raise capital from organizations;
c/ Borrowing loans from domestic and overseas credit institutions and financial institutions under law; borrowing loans from the State Bank in the form of re-financing under the Law on the State Bank of Vietnam;
d/ Providing loans, including amortized loans and consumer loans;
e/ Providing bank guarantee;
f/ Discounting and re-discounting negotiable instruments and other valuable papers;
g/ Issuing credit cards, factoring, financial leasing and other forms of credit extension after obtaining the State Bank's approval.
2. The Government shall specify conditions for finance companies to conduct banking operations prescribed in Clause 1 of this Article.
Thus, based on the above provisions, financial companies are entitled to carry out banking operations, including:
+ Taking deposits of organizations;
+ Issuing deposit certificates, promissory notes, bills or bonds to raise capital from organizations;
+ Borrowing loans from domestic and overseas credit institutions and financial institutions under law; borrowing loans from the State Bank in the form of re-financing under the Law on the State Bank of Vietnam;
+ Providing loans, including amortized loans and consumer loans;
+ Providing bank guarantee;
+ Discounting and re-discounting negotiable instruments and other valuable papers;
+ Issuing credit cards, factoring, financial leasing and other forms of credit extension after obtaining the State Bank's approval.
Can a financial company carry out all banking operations? Are financial companies in Vietnam allowed to issue credit cards?
Are financial companies in Vietnam allowed to issue credit cards?
According to the provisions of Article 12 of Decree No. 39/2014/ND-CP (Point c, Clause 2 of this Article is annulled by Clause 2, Article 2 of Decree No. 16/2019/ND-CP) on the issuance of credit cards of financial companies in Vietnam as follows:
- Financial companies may issue credit cards if meeting all the conditions prescribed in Clause 1, Article 11 of this Decree.
- Financial companies established and operating before the effective date of this Decree may add the issuance of credit cards if meeting all the conditions prescribed in Clause 1 of this Article and the following conditions:
+ The conditions prescribed at Points c, d and dd, Clause 2, Article 11 of this Decree;
+ Having profitable business operation for at least two consecutive years preceding the year of requesting the operation addition;
What are other business activities of finance companies in Vietnam?
According to the provisions of Article 111 of the 2010 Law on Credit Institutions in Vietnam, financial companies also carry out the following business activities:
Other business activities of finance companies
1. Receiving capital entrusted by the Government, organizations and individuals for investment in production and business projects or licensed credit extension; entrusting capital to credit institutions for credit extension. The receipt of capital entrusted by individuals and capital entrustment to credit institutions for credit extension comply with the State Bank's regulations.
2. Participating in the monetary market under Article 104 of this Law.
3. Selling and purchasing government bonds and corporate bonds.
4. Underwriting the issue of government bonds and corporate bonds; acting as agents to issue bonds, stocks and other valuable papers.
5. Providing foreign exchange services under the State Bank's regulations.
6. Acting as insurance agents.
7. Providing banking, financial and investment consultancy services.
8. Providing asset management and preservation services.
Thus, in addition to banking operations, opening accounts, contributing capital, purchasing shares, finance companies also perform the following activities:
- Receiving capital entrusted by the Government, organizations and individuals for investment in production and business projects or licensed credit extension; entrusting capital to credit institutions for credit extension. The receipt of capital entrusted by individuals and capital entrustment to credit institutions for credit extension comply with the State Bank's regulations.
- Participating in the monetary market under Article 104 of this Law.
- Selling and purchasing government bonds and corporate bonds.
- Underwriting the issue of government bonds and corporate bonds; acting as agents to issue bonds, stocks and other valuable papers.
- Providing foreign exchange services under the State Bank's regulations.
- Acting as insurance agents.
- Providing banking, financial and investment consultancy services.
- Providing asset management and preservation services.
Nguyễn Thị Hồng Nhung
