Circular 26/2024/TT-NHNN financial leasing activities of general finance companies and financial leasing companies

CIRCULAR

On financial leasing activities of general finance companies and financial leasing companies

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Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to the Government’s Decree No. 102/2022/ND-CP dated December 12, 2022, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Department of Credit for Economic Sectors;

The Governor of the State Bank of Vietnam hereby promulgates the Circular on financial leasing activities of general finance companies and financial leasing companies.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular prescribes financial leasing activities of general finance companies and financial leasing companies.

Article 2. Subjects of application

1. General finance companies and financial leasing companies as prescribed in the Law on Credit Institutions.

2. Organizations and individuals involved in financial leasing activities of general finance companies and financial leasing companies as prescribed in Clause 1 of this Article.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Financial leasing means medium- or long-term credit extension under a financial leasing contract between the lessors and the lessees. The lessors buy assets for financial leasing at the request of the lessees and hold the ownership over financially leased assets during the lease term. The lessees use the financially leased assets and pay rents therefor during the lease term under the financial leasing contracts.

2. Assets for financial leasing (below referred to as financially leased assets) mean machinery, equipment, tools, means of transport (except ships and aircraft carrying people) that are not on the list of prohibited purchases, sales, exports and imports as prescribed.

3. Financial lessor (including the purchaser and sublessor under the form of financial leasing) means a general finance company, or financial leasing company permitted for conducting financial leasing activities in accordance with laws.

4. Financial lessee (including the seller and sublessee under the form of financial leasing) means an organization or individual that is operating in Vietnam and directly uses the leased assets according to the purposes as agreed upon in the financial leasing contract.

5. Financial leasing contract means an irrevocable agreement signed between a lessor and a lessee on financial leasing of one or some leased assets in accordance with this Circular and relevant laws.

6. Rental means an amount payable by a lessee to a lessor as agreed upon in a financial leasing contract. Rentals include:

a) Loan principals determined based on the purchase price of the financially leased assets and legal costs related to the purchase and putting that asset into financial leasing operations;

b) Rental interests calculated according to regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank) on the method of calculating and accounting for interest revenue and payment of credit institutions.

7. Purchase and sublease in the form of financial leasing (below referred to as purchase and sublease) means that a lessor being a financial leasing company purchases financially leased assets under Clause 2 of this Article which are owned by a lessee and subleases such assets to the lessee in the form of financial leasing for continued use to serve their activities.  In the purchase and sublease transactions, the lessee is also the supplier of assets for leasing.

8. Financial lease term means a period from the time the financial lessee begins to owe the rentals until the time the rentals are fully paid as stipulated in the financial leasing contract.

9. The time of beginning to owe the rentals means the date the financial lessee receives the leased assets or the date the financial lessor makes the first payment to the supplier of the leased assets, whichever comes first.

10. The rental repayment term means the periods of time constituting the financial lease term agreed between the financial lessor and the financial lessee at the end of each period a financial lessee shall partially or fully repay the rentals to the financial lessor.

11. Restructuring the rental repayment term means the financial lessor's approval to adjust the debt repayment term or extend the debt repayment term for the rental loans of the financial lessee when the lessee is unable to repay the rentals as agreed in the financial leasing contract as follows:

a) Adjustment of the rental repayment term means that the financial lessor agrees to extend a period of time to pay part or all of the loan principal and/or interest of the repayment term within the agreed financial lease term, without changing the financial lease term;

b) Extension of debt means the financial lessor's agreement to extend the loan principal and/or interest for a period exceeding the agreed lease term.

12. A small-value financial leasing amount means a financial leasing amount prescribed in Clause 2 Article 102 of the Law on Credit Institutions, which does not exceed VND 100,000,000 (one hundred million).

Article 4. Financial leasing principles

Financial leasing activities of the financial lessor to the financial lessee shall be carried out according to the agreement between the financial lessor and the lessee, in accordance with this Circular and other relevant laws.

CHAPTER II
FINANCIAL LEASING ACTIVITIES

Article 5. Conditions on a leasing lessee

1. The financial lessor shall consider and decide on financial leasing when the financial lessee fully meets the following conditions, except for the cases specified in Clause 2 of this Article:

a) Having full civil legal capacity and civil act capacity as prescribed by law;

b) Renting assets for financial leasing to use for legal purposes;

c) Having a feasible plan to use financially leased assets;

d) Having the financial capacity to ensure the implementation of obligations under the financial leasing contract;

dd) For Vietnamese and foreign organizations, the financial lease term must not exceed the remaining operating term according to the establishment decision or operating license in Vietnam. For foreign individuals, the financial lease term must not exceed the remaining period of permitted residence in Vietnam.

2. The financial lessor shall consider and decide on granting a small-value financial leasing amount as prescribed in Clause 12 Article 3 of this Circular when the financial lessee meets at least the conditions specified at Points a, b, d, dd Clause 1 of this Article.

Article 6. Dossiers of proposal for financial leasing

The financial lessee shall send to the financial lessor a written request for financial leasing and the following documents:

1. Documents proving the satisfaction of the conditions for financial leasing prescribed in Article 5 of this Circular.

2. Information about the related person of a financial lessee includes:

a) Information about people related to the financial lessee who is subject to credit extension restrictions in accordance with the Law on Credit Institutions;

b) Information about people related to the financial lessee in accordance with the Law on Credit Institutions in case, at the time of request for financial leasing, the lessee has an outstanding balance of loans at the financial lessor (including the principal amount requested for financial leasing) greater than or equal to 0.5% of the financial lessor's equity capital at the end of the latest working day. In case the financial lessor has negative equity capital, the above rate shall be applied on the charter capital.

3. Information about people related to the financial lessee specified in Clause 2 of this Article includes:

a) Information about the related person who is an individual, including full name; personal identification number, for Vietnamese citizens; citizenship, passport number, date of issue and place of issue, for foreigners; relationship with the financial lessee;

b) Information about the related person who is an organization, including name, enterprise identification number, head office address of the enterprise, enterprise registration certificate number or equivalent legal documents, for organizations other than enterprises, at-law representative, and relationship with the financial lessee.

4. The financial lessor shall guide the financial lessee to provide information and documents specified in this Article.

Article 7. Financial leasing interest rate

1. The financial lessor and the lessee shall reach an agreement on the financial leasing interest rate in accordance with laws.  The financial leasing interest rate shall be calculated as %/year.

2. When payment is due and the lessee fails to pay or fully pay the loan principal and/or interest under the financial leasing contract, the lessee must pay the rental interest as follows:

a) Leasing interest on the principal at the agreed financial leasing interest rate corresponding to the lease term at the end of which repayment has not been made;

b) In case the financial lessee fails pay the leasing interest on time, the financial lessee must also pay the financial lessor interest on late payment interest at the interest rate agreed upon by the parties, but not exceeding 10%/year calculated on late payment interest during the late payment period;

c) Leasing interest on the overdue principal balance corresponding to the period of late payment at the overdue interest rate shall follow the agreement between the financial lessor and the financial lessee in the financial leasing contract but must not exceed 150% of the applicable leasing interest rate immediately before the overdue date for that principal balance.

3. In case the adjustable financial leasing interest rate is applied, the financial lessor and the lessee shall agree on principles and factors for determining the adjusted interest rate and time for adjustment. If the use of factors for determining the adjusted interest results in different interest rates, the financial lessor shall apply the lowest one.

Article 8. Charges for financial leasing activities

The financial lessor and the lessee agree to collect charges for financial leasing activities, including:

1. Charges for signing a financial leasing syndication contract between the financial lessors participating in the financial leasing syndication and the lessee. The charge for arranging a financial leasing syndication contract shall be agreed upon by the financial lessor and the lessee.

2. Charge for committing financial leasing (charge calculated based on time, from the time the financial leasing contract takes effect to the time the lessee receives financial lease debt).

3. Charge for ahead of schedule repayment of debts in case a financial lessee repays debts prior to the due date.

4. Other charges in relation to financial leasing activities specified in relevant legal documents.

Article 9. Currencies used in financial leasing

1. The financial lessor shall perform financial leasing in Vietnamese dong, except for cases where financial leasing is permitted in foreign currency as specified in Clause 2 of this Article.

2. Financial leasing in foreign currency must meet the following requirements:

a) The financial lessor pays the import of financially leased assets to the supplier in foreign currency; the financial lessee receives debt and pays the rentals in foreign currency;

b) The financial lessee uses the leased assets to serve production and business;

c) The financial lessee has enough foreign currency from production and business revenue to repay the rental loans.

Article 10. Appraisal and leasing decisions

1. The financial lessor shall appraise the financial lessee’s capability to satisfy the conditions for taking financial leasing under Article 5 of this Circular to make financial leasing decisions. The financial lessor may use its internal credit rating system together with information from the National Credit Information Center of Vietnam and other information channels for the appraisal.

2. The financial lessor shall consider and approve financial leasing based on the principle of separation of appraisal and decision-making responsibilities.

3. In case of refusal to provide financial leasing to the financial lessee, the financial lessor shall notify the reason therefor to the lessee at the latter’s request.

Article 11. Repayment of rental principal and interest

1. The financial lessor and financial lessee shall reach an agreement on the term for repayment of rental principal and interest as follows:

a) Repaying the rental principal and interest in different terms;

b) Repaying the rental principal and interest in the same term.

2. The financial lessor and financial lessee shall reach an agreement on repayment of rental principal and interest prior to the due date.

3. The financial lessor and financial lessee may agree on the order for recovery of the rental principal and interest.  For overdue rental loans, the financial lessor shall recover the rental principal first and the rental interest later. For rental loans with one or several overdue repayment terms, the financial lessor shall collect debts in the order of collection of overdue principals, collection of interest on unpaid overdue principals, collection of due principals, collection of interest on the principal that have not been paid by the due date.

Article 12. Rescheduling the rental repayment term

A financial lessor may consider and decide to reschedule a rental repayment term at the financial lessee’s request and on the basis of the financial lessor’s financial capability and result of evaluation of the financial lessee’s rental repayment capability as follows:

1. If the financial lessee fails to make due payment of its/his/her rental principal and/or interest within the agreed lease term and is evaluated by the financial lessor as having capability of paying off the rental principal and/or interest according to the to-be-adjusted rental repayment term, the financial lessor may consider adjusting the payment term of its/his/her rental principal and/or interest suitable to the financial lessee’s sources for debt payment.

2. If the financial lessee fails to pay off its/his/her rental principal and/or interest within the agreed lease term and is evaluated by the financial lessor as having capability of paying off rental principal and/or interest within a certain period following the lease term, the financial lessor may consider an extension suitable to the financial lessee’s sources for debt payment.

3. Rescheduling the rental repayment term shall be decided before or within 10 (ten) days from the agreed date of debt payment.

Article 13. Overdue debts

In case the financial lessee fails to repay the principal and/or interest on time according to the financial leasing contract and is not approved by the financial lessor to restructure the debt repayment term, the financial lessor shall notify the lessee of the overdue debts. Such a notification must at least specify the overdue rental principal balance and/or interests, the time the overdue debt arose, the interest rate applicable to the overdue principal balance, and the interest rate applicable to late payment interest amount.

Article 14. Rights of financial lessors

1. To not take responsibility for the financially leased assets not being delivered or delivered in contravention of the conditions agreed upon by the lessee with the supplier.

2. To own leased assets and not to be affected in case the lessee goes bankrupt, is dissolved or involved in a dispute or lawsuit at court related to a third party, unless otherwise prescribed by law or agreed by the parties.  Leased assets are not regarded as assets of the lessee upon the handling of assets for payment of debts to other creditors.

3. To affix their ownership signs onto leased assets throughout the lease term.

4. To reach an agreement with lessees on applying security methods in accordance with laws.

5. To request lessees to report on their use of financially leased assets, and provide documents and data proving the proper use of leased assets during the lease term at the financial lessors’ requests and provide other information relating to the lessees and leased assets as agreed.

6. To examine the management and use of leased assets; and the debt repayment by the lessees as prescribed.

7. To request lessees to pay compensations when the latter violates terms and conditions of financial leasing contracts.

8. To terminate financial leasing contracts, recover debts and leased assets ahead of schedule as agreed upon in financial leasing contracts.

9. To recover damaged leased assets that cannot be restored, repaired or replaced, request lessees to pay their remaining rentals and expenses arising in the course of recovery of leased assets as agreed upon in financial leasing contracts.

10. To recover and perform rights of the owners of leased assets after the lease term expires if the lessees decide not to buy or continue to rent the assets specified in Clause 2 Article 16 of this Circular.

11. Other rights prescribed by law and in financial leasing contracts.

Article 15. Obligations of financial lessors

1. To take responsibility for providing truthfully and accurately to the financial lessees before signing financial leasing contracts the following information: financial leasing interest rate, interest rates applicable to overdue principal balance and late payment interest; principles and determining factors, time to determine financial leasing interest rates in case of applying adjusted financial leasing interest rates, charges and public posting of applicable charges for the lessee to consider and decide on signing a financial leasing contract.

2. To assess the leased assets, including their technical specifications, types, prices and time limits for delivery, installation and warranty; the feasibility and efficiency of plans and conditions on financial leasing, leased asset use purpose and lessees’ debt payment capacity.

3. To purchase and import assets already agreed upon by both parties in financial leasing contracts.

4. To register the ownership of, and carry out the procedures for buying insurance for, leased assets in accordance with law.

5. To guarantee the lessees the right to use the leased assets under the financial leasing contracts.

6. Other obligations prescribed by law and in financial leasing contracts.

Article 16. Rights of financial lessees

1. To receive and use leased assets under provisions of financial leasing contracts.

2. To decide on purchase or continued lease of assets upon the expiry of the lease term.

3. To request lessors to pay compensations for their violation of terms and conditions of financial leasing contracts.

4. To terminate their performance of financial leasing contracts ahead of schedule as agreed upon in financial leasing contracts.

5. To repair and increase the value of the leased assets if agreed in the financial leasing contracts.

6. Other rights prescribed by law and in financial leasing contracts.

Article 17. Obligations of financial lessees

1. To be responsible for the selection of leased assets, suppliers, terms and conditions relating to leased assets, including technical specifications, types, prices and time limits for delivery, installation and warranty and other leased asset-related terms and conditions.

2. To use leased assets for right purposes as agreed upon in financial leasing contracts; to refrain from selling or transferring the right to use leased assets to other individuals and organizations, unless otherwise agreed between lessors and lessees in financial leasing contracts.

3. To provide accurate and sufficient information, documents and data in a timely and honestly manner, and take responsibility for the provision of information, documents and data to the lessors in accordance with relevant laws and financial leasing contracts when receiving financial leasing from the lessors. To be specific:

a) Information and documents specified in Article 6 of this Circular when requesting financial leasing;

b) Report and provision of information and data to the lessors for the latter to perform their rights and execute their obligations of examination and supervision of the use of leased assets and debt repayment by the lessees during the lease term as prescribed;

c) Other information as agreed in financial leasing contracts.

4. To pay full rentals and other expenses related to leased assets on schedule under provisions of financial leasing contracts.

5. To bear all risks of loss of leased assets, all expenses for maintenance, repair or replacement of leased assets throughout the lease term and be responsible for all consequences caused by the use of leased assets to other organizations and individuals in the course of using leased assets.

6. To refrain from erasing or damaging lessors’ ownership signs affixed on leased assets.

7. To refrain from using leased assets for mortgage, pledge or use as security for performance of obligations.

8. Other obligations prescribed by law and in financial leasing contracts.

Article 18. Financial leasing contracts

1. Financial leasing contracts must be made in writing in accordance with the law on civil contracts and must include at least the following information:

a) Name and addresses of the financial lessor and the lessee;

b) Name, technical specifications, types, prices and time limits for delivery, installation and warranty of leased assets and other leased asset-related terms and conditions;

c) Leased asset use purposes;

d) Currency used in financial leasing and debt repayment;

dd) Rentals, time of beginning to owe the rentals; financial leasing interest rate; principles and factors for determining interest rates, time to determine financial leasing interest rates in case of applying adjusted financial leasing interest rates; charge types and rates; expenses as prescribed by law;

e) Lease term and rental repayment term;

g) Rescheduling the rental repayment ter, notification of overdue principals, interest rates applicable to overdue principal balance, interest rates applicable to late payment interests;

h) The repayment of rental principal and interest and the order for recovery of rental principal and interest; payment of loans ahead of schedule;

i) Cases where a financial leasing contract is terminated ahead of schedule, time of terminating ahead of schedule and handling of arising issues;

k) Agreement on measures to ensure the implementation of the financial lessor's ownership rights to the financially leased assets;

l) Responsibility and handling due to breach of contract, rights and obligations of the parties;

m) Method of dispute settlement;

n) Other contents of the financial leasing contract as agreed upon by the financial lessor and lessee in accordance with law.

2. The financial leasing contracts’ effective date shall be agreed upon by the parties.

3. Registration of the financial leasing contract shall comply with law provisions.

Article 19. Sanctioning of violations and compensation for damage

1. A financial lessor and a lessee shall agree on sanctioning of violations and compensation for damage in accordance with law in case either of them fails to comply with the agreements in the financial leasing contract.

2. A financial lessor and a lessee may agree on the violator to be subject to sanctions without having to pay compensation for damage or to be subject to sanctions and payment of compensation for damage.

In case a financial lessor and a lessee agree on sanctioning of violations but not both sanctioning and payment of compensation for damage, the violator shall be sanctioned only.

Article 20. Termination of financial leasing contracts ahead of schedule

1. A financial leasing contract may be terminated ahead of schedule when one of the following cases occurs:

a) The financial lessor discovers that the financial lessee has provided false information, violating the agreed content in the financial leasing contract, agreement, or warranty contract;

b) Financial lease assets are lost or damaged beyond repair and cannot be replaced;

c) The financial lessor violates one of the terms and conditions that are grounds for terminating the financial leasing contract, as specified in the financial leasing contract;

d) Cases of termination of financial leasing contracts ahead of schedule according to legal regulations and financial leasing contracts.

2. The financial lessor and the lessee shall specify cases of terminating the financial leasing contract ahead of schedule specified in Clause 1 of this Article in the financial leasing contract.

In case one party unilaterally terminates the performance of a financial leasing contract, the party that unilaterally terminates the performance of the contract must immediately notify the other party of the contract termination.  The content of the notice of unilateral termination of contract performance and the time of early contract termination shall be agreed upon by the parties in the financial leasing contract in accordance with the law.

3. The handling of financial leasing contracts terminated ahead of schedule shall comply with Article 21 of this Circular and relevant laws.

Article 21. Handling of financial leasing contracts terminated ahead of schedule

1. In case the financial leasing contract is terminated ahead of schedule specified at Points a and b Clause 1 Article 20 of this Circular, the rental payment is carried out as follows:

a) The financial lessee must pay all remaining rental payable under the financial leasing contract up to the time of early termination of the financial leasing contract, including:  principal, rental interest, and interest on late payment interest (if any). Rentals shall be recovered in accordance with Clause 3 Article 11 of this Circular;

b) The financial lessee must pay the entire rental amount specified at Point a of this Clause on time as agreed upon by the parties in the financial leasing contract.  In case the parties do not have an agreement, the time the financial lessee must pay all remaining rental payable under the financial leasing contract is the time of termination of the financial leasing contract ahead of schedule.

c) In case the financial lessee cannot pay on time the entire rental amount specified at Points a and b of this Clause, the financial lessee must pay overdue interest on the unpaid principal and late payment interest for unpaid interest as agreed in the financial leasing contract.

2. In case the financial leasing contract is terminated ahead of schedule under Points c and d, Clause 1, Article 20 of this Circular, the rental payment shall be carried out in accordance with the financial leasing contract and relevant laws.

3. Handling of financially leased assets and other issues in the financial leasing contract in case the financial leasing contract is terminated ahead of schedule as specified in Clause 1 Article 20 of this Circular, the financial lessor and the lessee shall comply with the provisions of the financial leasing contract and relevant laws.

Article 22. Examination and supervision of financial leasing

1. Except for the cases specified in Clause 2 of this Article, the financial lessor has the right and obligation to inspect and supervise the use of financially leased assets and debt repayment of the financial lessee; has the right to request the financial lessee to report the use of financially leased assets and provide documents and data proving that the financially leased assets are used properly.

2. For a small-value financial leasing amount specified in Clause 2 Article 5 of this Circular, the financial lessor has the right to examine and supervise the use of financially leased assets and debt repayment of financial lessee; has the right to request the financial lessee to report the use of financially leased assets and provide documents and data proving that the financial leased assets are used properly.

Article 23. Certificates of ownership of financially leased assets

During the lease term, the financial lessor shall hold the original Certificate of ownership of the leased assets.  The financial lessee may use a copy certified by the competent state agency for the use of leased assets.

Article 24. Internal regulations

1. Pursuant to the Law on Credit Institutions, this Circular and relevant laws, the financial lessor shall issue internal regulations on financial leasing, including provision of financial leasing by electronic means (if any), management of leased assets in conformity with the characteristics of its business activities (below referred to as internal regulations on financial leasing).

2. A financial lessor's internal regulations on financial leasing shall be applied to its entire system and must contain a mechanism for control, internal audit, and risk management in financial leasing activities of the financial lessor. Such a regulation must at least contain the following details:

a) Criteria for determining a financial lessee, a financial lessee and related persons according to regulations and financial leasing policies applicable to a financial lessee, a financial lessee and related persons, regulations on the process of appraisal, approval and decision on financial leasing, principles of decentralization, authorization and responsibilities of each individual and department in the appraisal, decision and approval of financial leasing, restructuring the financial leasing repayment term for the financial lessee;

b) Conditions for financial leasing, cases where financial leasing is not allowed, financial leasing restrictions as prescribed by law, types of assets not allowed for financial leasing; financial leasing interest rates and rental interest calculation methods; dossiers of financial leasing and documents sent by the financial lessee to the lessor in accordance with the characteristics of the financially leased assets and the financial lessees; debt collection; conditions to be considered for restructuring the financial leasing repayment term, and notifying overdue debt;

c) Regulations on risk dispersion in financial leasing activities; methods of monitoring, managing and approving and deciding on financial leasing for a financial lessee, a financial lessee and related persons at a level from 1% of the financial lessor's equity capital, ensuring publicity and transparency between the stage of appraisal, financial leasing and restructuring the financial leasing repayment term, preventing conflicts of interest between appraisers, financial leasing decision makers and the lessees who are related persons of such people;

d) Principles and criteria for evaluating and determining the level of financial leasing risk for financial lessees and areas in which the financial lessor prioritizes or restricts credit extension as a basis for developing annual business plans and strategies, financial leasing risk management measures for financial lessees;

dd) Procedures for examining and supervising the financial leasing process, using financially leased assets and repaying rentals by the lessee (including small-value financial leasing amount), which include control before, during and after financial leasing; decentralization, authorization and responsibilities of each individual and department in examining and supervising the financial leasing process, using financially leased assets and repaying rentals by the lessee;

e) The review and approval of financial leasing and consider and decision to restructure the financial leasing repayment term (including debt extension and adjustment of the repayment term) must be carried out on the principle that the person deciding on restructuring the financial leasing repayment term is not the person who decides on the financial lease unless the financial lease is approved by the Board of Directors and Members’ Council;

g) Regulations on examination and supervision of financially leased assets and debt repayment of the financial lessee;

h) Termination and handling of financial leasing contracts terminated ahead of schedule; exemption or reduction of interest rates and charges;

i) The identification of risks that may arise during the financial leasing process (including financial leasing by electronic means); the process of monitoring, evaluation and control of risks, risk handling plans;

k) Plan for handling emergencies.

3. Within 10 working days from after issuing new or revised internal regulations, general finance companies and financial leasing companies shall send them to the State Bank (the Banking Supervision Agency and State Bank branches of provinces and cities where they are headquartered) in accordance with laws.

Article 25. Approval for financial leasing by electronic means

1. The financial lessor and the lessee may choose to conduct financial leasing approval through the use of electronic means (hereinafter referred to as financial leasing approval by electronic means) for the amount requested for financial leasing approval not exceeding VND 500,000,000 (five hundred million).

The implementation of financial leasing approval by electronic means shall comply with this Circular; the law on anti-money laundering; electronic transactions; personal data protection; safety and security for providing online services in the banking industry and relevant laws.

2. The financial lessor shall decide on its own measures, forms and technologies to carry out financial leasing approval by electronic means for all or each stage in the financial leasing approval process, and shall take responsibility for the arising risks (if any) and must at least meet the following requirements:

a) The measures, forms and technologies chosen by the financial lessor must ensure standards of security, safety and confidentiality according to the regulations of the State Bank and relevant laws;

b) Applying forms of electronic transaction authentication during the process of reviewing and approving financial leasing by electronic means in accordance with relevant laws;

c) Storing and preserving complete and detailed documents, information, and data identifying the financial lessee during the financial leasing approval process by electronic means.  Information and data must be stored safely, securely, and backed up, ensuring the completeness and integrity of the data to serve the work of checking, comparing, and authenticating the lessee in the process of implementing financial leasing via electronic means; resolving inquiries, complaints, disputes and providing information upon request from competent agencies. The period of storage and preservation shall comply with the law on anti-money laundering and the law on electronic transactions;

d) Conducting inspections and assessments of the safety and security levels of measures, forms, and technologies and temporarily suspending service provision for upgrading, editing, and improvement in case of signs of insecurity;

dd) Assigning specific responsibility for each individual or department involving in the approval for financial leasing by electronic means in the management and control of risks. In case a risk arises, the financial lessor must have a mechanism to identify each responsible individual and department and promptly handle arising problems and risks to ensure efficiency and safety in the process of implementing financial leasing by electronic means.

3. The information system approving financial leasing by electronic means must follow the regulations on ensuring information system security at level 3 or higher according to the Government’s provisions on the security of information systems by classification, and the State Bank of Vietnam's provisions on security of information systems in banking activities.

Chapter III

PURCHASE AND SUBLEASE

Article 26. Principles of purchase and sublease

1. Purchase and sublease transactions must be carried out through an asset purchase contract and financial leasing contract between the purchaser and sublessor, the seller and sublessee. The asset purchase contract takes effect from the effective date of the financial leasing contract.

2. In the purchase and sublease transaction, the purchaser and sublessor hold the ownership of the leased and subleased assets to the seller and sublessee in the form of financial leasing in accordance with regulations on financial leasing provided in this Circular.  The transfer of asset ownership from the seller and sublessee to the purchaser and sublessor shall be carried out in accordance with laws.

3. The purchaser and sublessor shall choose the assets and the seller and sublessee with the ability to repay debt to carry out the purchase and sublease transaction in a safe and effective manner.

4. The purchaser and sublessor shall purchase and sublease in VND or foreign currency.  The purchase and sublease shall be carried out in a foreign currency when:

a) Assets purchased and subleased are financially leased assets, that are imported and meet the requirements in Article 27 of this Circular;

b) The seller and sublessee currently have outstanding debt in foreign currency at the bank to import assets, or have outstanding debt in foreign currency that has not been paid to the foreign supplier;

c) The seller and sublessee use the purchased and subleased assets to serve production and business and have enough foreign currency from production and business revenue to pay the rental loans;

d) Payment for purchased and subleased assets in foreign currency:

The purchaser and sublessor proceed to purchase and sublease when the seller and sublessee present complete legal documents about the assets.  In case a bank or foreign supplier manages and holds dossiers related to the assets, the purchaser and sublessor shall pay the purchase price after agreeing with the bank or foreign supplier to receive asset-related dossiers when repurchasing purchased and sub-leased assets;

The purchaser and sublessor directly pay the purchase price for the purchased and subleased assets to the bank or foreign supplier in foreign currency corresponding to the value of the purchased and subleased assets. In case the asset repurchase price is greater than the outstanding bank loan balance or foreign supplier debt, the purchaser and sublessor shall pay the seller and sublessee the difference in VND at the exchange rate of the commercial bank chosen by both parties at the payment date;

dd) After the purchaser and sublessor pay for the purchased and sub-leased assets, the seller and sublessee accept the debt and pay the rentals in foreign currency in accordance with applicable regulations on financial leasing.

Article 27. Purchased and subleased assets

When performing a purchase and sublease transaction, the purchased and sublease assets must meet the following conditions:

1. Being legally owned by the seller and sublessee.

2. Undisputed assets.

3. Assets are not used to secure the performance of other obligations

4. Assets under normally operation.

5. Purchased and subleased assets are financially leased assets, that meet the requirements in Articles 2 and 3 of this Circular.

Article 28. Asset purchase contracts

An asset purchase contract must have the following principal contents: names and addresses of the parties; purpose of purchasing asset; asset description; asset purchase price; payment methods; time, place of contract performance, method of contract performance; rights and obligations of the parties; liability for breach of contract, penalties for breach of contract and other contents as agreed in accordance with the law on asset purchase and sale.

Article 29. Rights and obligations of the parties in purchase and sublease transactions

1. Rights and obligations of the purchasers and sublessors:

a) To request the seller and sublessee to provide full information and documents related to the assets (except for cases where banks or foreign suppliers manage and hold asset-related dossiers specified at Point d Clause 4 Article 26 of this Circular);

b) To request the seller and sublessee to issue legal sales invoices, hand over all ownership documents and other relevant documents of the assets;

c) To request the seller and sublessee to compensate for damages caused by disputes arising related to the assets and asset ownership of the seller and sublessee;

d) To pay the seller and sublessee the amount as agreed in the asset purchase contract;

dd) To correctly and fully comply with the terms agreed in the asset purchase contract.

2. Rights and obligations of the sellers and sublessees:

a) To receive proceeds from the sale of assets paid by the purchasers and sublessors as agreed in the asset purchase contract;

b) To provide fully, accurately, and truthfully all information and documents related to the assets at the request of the purchasers and sublessors;

b) To issue legal sales invoices, hand over all ownership documents and relevant documents of the assets;

c) To compensate for the purchasers and sublessors for damages caused by disputes arising related to the assets and asset ownership of the sellers and sublessees;

dd) To correctly and fully comply with the terms agreed in the asset purchase contracts.

3. In addition to the rights and obligations specified in Clauses 1 and 2 of this Article, the purchasers and sublessors, the sellers and sublessees have other rights and obligations in accordance with relevant laws.

Chapter IV
IMPLEMENTATION ORGANIZATION

Article 30. Responsibilities of units affiliated to the State Bank

1. The Department of Credit for Economic Sectors shall:

a) Monitor and examine the implementation of financial leasing in accordance with this Circular;

b) Act as a focal point in handling the arising concerns relating to financial leasing activities in accordance with this Circular;

2. The Banking Supervision Agency shall:

a) Monitor, examine and supervise the financial leasing activities according to the function and tasks;

b) Coordinate with the Department of Credit for Economic Sectors in handling arising concerns.

3. The Finance and Accounting Department shall guide credit institutions and foreign bank branches to implement cost-accounting regulations applicable to financial leasing activities.

4. The Information Technology Department shall provide guidance on application of information technology in approval for financial leasing by electronic means of general finance companies and financial leasing companies.

5. The State Bank’s provincial-level branches shall examine, monitor, inspect and supervise financial leasing activities of general finance companies and financial leasing companies specified in this Circular according to their competence.

6. The National Credit Information Center of Vietnam shall:

a) Receive and summarize information about financial leasing provided by general finance companies and financial leasing companies;

b) Provide information about financial leasing activities of general finance companies and financial leasing companies in accordance with regulations on credit information activities of the State Bank.

Article 31. Transitional provisions

For financial leasing contracts signed before the effective date of this Circular, the financial lessors and the lessees may continue to comply with the signed agreements until the end of the term of the financial leasing contracts. In case of amendments or supplements, the financial leasing contracts must comply with the provisions of this Circular.

Article 32. Effect

This Circular takes effect from July 1, 2024.

Article 33. Implementation organization

The Chief of Office, the Director of the Department of Credit for Economic Sectors, Heads of units affiliated to the State Bank of Vietnam, Directors of State Bank branches in provinces or centrally-run cities, general finance companies and financial leasing companies shall implement this Circular./.