What is the legal capital of financial leasing companies in Vietnam? What are the banking operations of financial leasing companies in Vietnam?
What is the legal capital of financial leasing companies in Vietnam?
Pursuant to Article 2 of Decree 86/2019/ND-CP stipulating the legal capital level of credit institutions as follows:
Levels of legal capital
1. Commercial banks: 3,000 billion dong.
2. Policy banks: 5,000 billion dong.
3. Cooperative banks: 3,000 billion dong.
4. Foreign bank branches: 15 million U.S. dollars (USD).
5. Financial companies: 500 billion dong.
6. Financial leasing companies: 150 billion dong.
7. Microfinance institutions: 05 billion dong.
8. People’s credit funds, each of which operates within a commune or town (hereinafter referred to as commune): 0.5 billion dong.
9. People’s credit funds, each of which operates within a ward; people’s credit funds, each of which operates within an inter-commune, commune-ward and inter-ward area: 01 billion dong.
Thus, according to the above regulations, the financial leasing company must have a legal capital of 150 billion dong.
What is the legal capital of financial leasing companies in Vietnam? What are the banking operations of financial leasing companies in Vietnam? (Image from the internet)
What is included in the financial leasing activity of financial leasing companies in Vietnam?
Pursuant to Article 113 of the 2010 Law on Credit Institutions in Vietnam on credit extension as follows:
Financial leasing
Financial leasing activity means the extension of medium- or long-term credit under a financial leasing contract on any of the following conditions:
1. Upon the termination of the lease term under contract, the lessee is entitled to ownership right over the leased asset or continue the asset lease as agreed upon by the two parties;
2. Upon the termination of the lease term under contract, the lessee is prioritized to purchase the leased asset at a nominal price lower than the actual value of the leased asset at the time of purchase;
3. The lease term of an asset is at least equal to 60% of the time required for its depreciation;
4. The total rent of an asset prescribed in the financial leasing contract is at least equal to the value of that asset at the time of contract signing.
Thus, financial leasing activity means the extension of medium- or long-term credit under a financial leasing contract on any of the following conditions:
(1) Upon the termination of the lease term under contract, the lessee is entitled to ownership right over the leased asset or continue the asset lease as agreed upon by the two parties;
(2) Upon the termination of the lease term under contract, the lessee is prioritized to purchase the leased asset at a nominal price lower than the actual value of the leased asset at the time of purchase;
(3) The lease term of an asset is at least equal to 60% of the time required for its depreciation;
(4) The total rent of an asset prescribed in the financial leasing contract is at least equal to the value of that asset at the time of contract signing.
What are the banking operations of financial leasing companies in Vietnam?
Pursuant to Article 112 of the 2010 Law on Credit Institutions in Vietnam stipulating the banking operations of financial leasing companies as follows:
Banking operations of financial leasing companies in Vietnam
1. Taking deposits from organizations.
2. Issuing deposit certificates, promissory notes, bills and bonds to raise capital from organizations.
3. Borrowing loans from domestic and overseas credit institutions and financial institutions according to law; borrowing loans from the State Bank in the form of refinancing under the Law on the State Bank of Vietnam.
4. Conducting, financial leasing.
5. Providing loans for financial lessees to add to their operating capital.
6. Providing operating leases on the condition that the total value of assets under operating leases does not exceed 30% of their total assets.
7. Extending credit in other forms after obtaining the State Bank's approval.
Thus, in addition to financial leasing, the finance leasing company may also perform the following banking operations:
- Taking deposits from organizations.
- Issuing deposit certificates, promissory notes, bills and bonds to raise capital from organizations.
- Borrowing loans from domestic and overseas credit institutions and financial institutions according to law; borrowing loans from the State Bank in the form of refinancing under the Law on the State Bank of Vietnam.
- Conducting, financial leasing.
- Providing loans for financial lessees to add to their operating capital.
- Providing operating leases on the condition that the total value of assets under operating leases does not exceed 30% of their total assets.
- Extending credit in other forms after obtaining the State Bank's approval.
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