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THE GOVERNMENT
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.
81/2008/ND-CP
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Hanoi, July 29, 2008
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DECREE
ON
THE AMENDMENT, SUPPLEMENT OF SEVERAL ARTICLES OF THE DECREE NO. 79/2002/ND-CP
DATED 4 OCTOBER 2002 OF THE GOVERNMENT ON ORGANIZATION AND OPERATION OF FINANCE
COMPANIES
THE GOVERNMENT
- Pursuant to the Law on the Government's organization dated 25
December 2001;
- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12 December
1997 and the Law on amendment, supplement of several articles of the Law on
State Bank of Vietnam No. 10/2003/QH11 dated 17 June 2003;
- Pursuant to the Law on Credit Institutions No. 02/1997/QH10 dated 12 December
1997 and the Law on amendment, supplement of several articles of the Law on
Credit Institutions No. 20/2004/QH11 dated 15 June 2004;
- Pursuant to the Law on Enterprises No. 60/2005/QH11 dated 29 December 2005;
- Upon the proposal of the Governor of the State Bank of Vietnam,
DECREES:
Article 1. To amend, supplement several articles of the Decree No.
79/2002/ND-CP dated 4 October 2002 of the Government on organization and
operation of Finance Companies as follows:
1. Article 2 shall be amended, supplemented as follows:
"Article 2. Definition of
Finance Company
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2. A finance company also
includes the form of a general finance company which is entitled to perform all
functions, operations in accordance with applicable provisions and the form of
a specialized finance company which mainly engages in some sectors such as:
consumer credit or credit card issuance and other activities in accordance
provisions of applicable laws, of this Decree and guidance of the State Bank of
Vietnam."
2. Article 3 shall be amended, supplemented as follows:
"Article 3. Form of
establishment
1. A finance company shall be established
and operate in Vietnam under following forms:
a. A limited liability finance
company with 2 members and more;
b. One member limited liability
finance company;
c. Joint stock finance company
2. The change of ownership,
transformation of form (type) of the finance company shall be performed in
accordance with applicable provisions of the State Bank of Vietnam."
3. To supplement paragraphs: 3, 4, 5, 6,7, 8 and 9 to Article 6 as
follows:
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3. Foreign credit institution
includes banks, finance companies, finance groups which are established in
accordance with foreign laws.
4. Joint venture finance company
means the finance company established in Vietnam by contributed capital of
Vietnamese Party (including one or several credit institutions, enterprises of
Vietnam) and of Foreign Party (including one or several foreign credit
institutions) on the basis of a joint venture contract, of which the
contributed capital by foreign party does not exceed 49% of charter capital of
the finance company, the contributed capital of a Vietnamese enterprise does
not exceed 30% of the contributed capital by Vietnamese party. Joint venture
finance company is established in the form of a limited liability company with
2 members and more.
5. 100% foreign owned finance
company is the finance company established in Vietnam, of which 100% charter
capital owned by one or several foreign credit institutions. 100% foreign owned
finance company is established in the form of a limited liability company.
6. Consumer credit is a form of
granting credit to individual via such operations as: lending for installment
purchase, credit card issuance and lending in money in accordance with
applicable provisions of the State Bank of Vietnam.
7. Home country for a foreign
credit institution means the country where the foreign credit institution is
established.
8. Subsidiary company: a company
shall be considered as a subsidiary of the finance company if it satisfies one
of following conditions:
a. It has over 50% of charter
capital belonging to the ownership of the finance company
b. The appointment of majority
or all of members of its Board of Directors and General Director (Director) is
subject to the decision of the finance company.
c. The amendment of, supplement
to the Charter of the subsidiary company is subject to the decision competence
of the Finance Company."
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"Article 8. Conditions for
the issuance of licence
2. Besides the conditions
mentioned in Paragraph 1 of this Article, the foreign credit institution to a
joint-venture finance company, or 100% foreign owned finance company is
required to satisfy following conditions:
a. To be permitted by
authorities to establish and operate in Vietnam in accordance with applicable
provisions of its home country's laws;
b. Its total assets are over USD
10 billion by the end of the year prior to the time of application, unless
otherwise provided for by Bilateral Investment Agreement between Vietnam and
its home country."
5. To replace Article 14, 15 and 16 by new Articles 14, 15 and 16 as
follows:
"Article 14. The opening of
branch, representative office and establishment of subsidiary company
1. The opening and operation
termination of a domestic, oversea branch, representative office of the Finance
Company must be approved in writing by the State Bank of Vietnam. Conditions
regarding application file, procedures for opening and operation termination of
the branch, representative office of a finance company shall be in accordance
with Article 33 of the Law on Credit Institutions and guidance of the State
Bank of Vietnam.
2. A finance company shall be
entitled to establish its subsidiary for engaging in areas of finance, banking,
insurance, securities. The establishment of the subsidiary of the finance
company shall be performed in accordance with applicable provisions of the
State Bank.
Article 15.
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a. Function of the Board of
Directors is to manage Finance Company, to make decision at its own discretion
on behalf of the Finance Company, to perform rights and obligations of the
Finance Company, except for issues subject to the authority of Shareholders'
General Assembly (for joint stock finance company) or of owner (for one member
limited liability finance company) or of capital contribution members (for
limited liability finance company with 2 members and more).
b. Board of Directors shall
consist of at least 3 members, including prestigious persons who possess
professional ethics, are knowledgeable about finance, banking activity.
Chairman and other members of Board of Directors shall not be entitled to
authorize any person who is not member of the Board of Directors to perform
their duties, authorities.
c. Term of Board of Directors
and of its member shall be from 3 to 5 years according to the specific
provisions in the Charter of Finance Company. Where a member of Board of
Directors is additionally elected or elected as substitute for a member who is
dismissed, relieved from office in the middle of his term, then the term of the
additional or substitute member shall be the remaining period of the Board's
term. Member of Board of Directors may be reelected with unlimited number of
terms and may be dismissed, relieved from his office at any time upon the
decision of the agency competent to elect, appoint or nominate.
d. Board of Directors shall use
the seal of the Finance Company for performing its duties.
2. Controllers Committee
a. Controllers Committee shall
be responsible for examining financial activity; supervising the compliance
with the accounting regime, prudential ratio in the operation of the Finance
Company, performing the internal audit regime from time to time, for each
sector in order to make accurate assessment for business activity and financial
situation of the Finance Company.
b. Controllers Committee shall
consist of at least 3 persons, of which at least one person is Chief of the
Committee and at least a half of members of the Committee are specialized and
responsible Controllers. Controllers must satisfy requirements of professional
standard and professional ethics stipulated by the State Bank.
c. Controllers Committee has its
assistant body and is entitled to use the internal inspection and control
system of the Finance Company to perform its duties.
d. Term of Controllers Committee
and of its member shall be from 3 to 5 years according to the specific
provisions in the Charter of Finance Company. Where a Controller is
additionally elected or elected as substitute for the Controller who is
dismissed, relieved from office in the middle of his term, then the term of
that additional or substitute controller shall be the remaining period of the
Committee's term. Controllers may be reelected with the unlimited number of
terms.
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a. Board of Directors shall
appoint one of its members as General Director (Director) or outsource a
General Director (Director). General Director (Director) of the Finance Company
shall be responsible to Board of Directors for the management of daily
activities based on his duties, authorities in line with provisions of this
Decree and other provisions of applicable laws. General Director (Director)
shall be legal representative of the Finance Company unless otherwise provided
for in the Charter of Finance Company.
b. Term of General Director
(Director) shall not be in excess of 5 years as specifically stipulated in the
Charter of the Finance Company. General Director (Director) may be reappointed
with the unlimited number of terms.
c. General Director (Director),
Deputy General Director (Deputy Director) of the Finance Company must satisfy
standards as provided for in Paragraph 2, Article 39 of the Law on Credit
Institutions.
d. General Director (Director)
of the Finance Company shall not be permitted to be General Director (Director)
or Chairman of Board of Directors of another credit institution, except for
case where that credit institution is a subsidiary of the Finance Company.
dd. Board of Directors shall
provide in details for the structure, functions, duties of the assistant body
to General Director (Director).
Article 16. State Bank shall
provide specific guidance on functions, duties, authorities and mode of
election, appointment, dismissal, approval of members of Board of Directors, of
Controllers Committee and General Director (Director) of the Finance Company.
6. To replace Paragraph 2 and supplement Paragraph 5 to Article 17 as
follows:
" Article 17. Modes of
capital mobilization
2. To issue bond, deposit
certificate and other valuable papers with the term of one year and more to
mobilize capital from domestic and foreign organizations and individuals under
applicable provisions of State Bank of Vietnam.
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7. To supplement Paragraph 4, Article 18 as follows:
"Article 18. Lending
4. For specialized Finance
Company
a. The Finance Company engaging
in consumer credit area, shall be entitled:
- To extend consumer credit in
the form of lending for installment purchase, credit card issuance and lending
in money;
- To supply services of finance,
banking, monetary, consumer investment consultancy to customers
- Other forms in accordance with
provisions of the State Bank.
b. Finance Company engaging in
card area shall comply with provisions in the Decree No. 64/2001/ND-CP dated 20
September 2001 of the Government on payment activity through payment services
suppliers and guidance of the State Bank, provided that revenue of credit card
issuance shall not be less than 70% of the Company's revenue."
8. To replace Paragraph 1 of Article 25 as follows:
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Foreign exchange activity:
Finance Companies shall be entitled to supply some foreign exchange services in
accordance with provisions of applicable laws and guidance of the State Bank of
Vietnam."
Article 2. Implementing provisions
1. This Decree shall be effective
after 15 days since its publication in the Official Gazette;
2. State Bank of Vietnam and
related ministries, industries shall be responsible for providing guidance on
the implementation of this Decree.
3. Ministers, Heads of
Ministerial Level Agencies, Heads of Government's agencies, Chairman of
People's Committee in provinces, cities under the central Government's
management shall be responsible for the implementation of this Decree.
ON BEHALF OF THE GOVERNMENT
PRIME MINISTER
Nguyen Tan Dung