VietnameseDirective 01/2007/CT-NHNN on the reorganization of operation of finance leasing companies
ATTRIBUTE
Directive No. 01/2007/CT-NHNN dated March 06, 2007 of the State Bank on the reorganization of operation of finance leasing companies
| Issuing body: | State Bank of Vietnam | Effective date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Official number: | 01/2007/CT-NHNN | Signer: | Dang Thanh Binh |
| Type: | Directive | Expiry date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Issuing date: | 06/03/2007 | Effect status: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Fields: | Finance - Banking |
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THE STATE BANK OF VIETNAM ------------- | SOCIALIST REPUBLIC OF VIETNAM Independence Freedom Happiness ------------------ |
No. 01/2007/CT-NHNN | Hanoi, March 06, 2007 |
DIRECTIVE
ON THE REORGANIZATION OF OPERATION OF FINANCE LEASING COMPANIES
In recent years, finance leasing companies have made many efforts in the development of business production activity, market expansion, continuous improvement of the customer service qualityAs a result, one more important capital distribution channel has been created to satisfy the demand for economic development, especially to provide opportunity to small and medium enterprises to approach to the medium, long-term capital source with simpler conditions and modes. However, the actual operation of finance leasing companies in the past time also showed some shortcomings, some of which may cause effect to the prudence in operation of the companies, such as: the appraisal, selection of customers have not been closely performed, some customers who do not have adequate legal status, do not have sufficient financial capacity, lease the assets that are not in correspondence with the operational function of the companies, are still considered to lease finance by some companies; especially, some finance leasing companies showed the signal of abetting the lessee in raising the price of the leased asset, creating opportunity for the lessee to take advantage of the capital upon the lease of asset and violate the state laws; some companies relax their inspection, supervision to the lessee and the leased asset, as a result, there have been many cases where the lessee does not use leased asset but leases it again or sells the asset but finance leasing companies do not know, which causes risk in the operation of finance leasing companies.
In order to comply with provisions of laws, and intensify the responsibility of finance leasing companies in business activity, restrain risks caused by some individuals who take advantage of the aperture of the laws to intentionally contravene the laws and cause losses in asset, the State Bank of Vietnam would like to request:
1. Finance leasing companies:
a. To examine and fully issue legal documents, internal regulations on the organization and operation of the companies in compliance with provisions in the Decree No.16/2001/ND-CP dated 2/5/2001 of the Government on the organization and operation of finance leasing companies and the Decree No. 65/2005/ND-CP dated 19/5/2005 of the Government on the amendment, supplement of several articles of the Decree No.16/2001/ND-CP dated 2/5/2001 of the Government on the organization and operation of finance leasing companies and guiding documents of the State Bank of Vietnam.
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