On 7th May 2014, the Government issued Decree No. 39/2014/ND-CP on  operation of financial company and financial leasing company.  Decree stipulates the general conditions for financial company to perform its  banking operation, including: 

  1. The banking operation of financial company must be specified in the  Establishment and Operation Permit issued by State Bank. 
  2. Having qualified staff with professional capacity, material facilities,  technology, means, equipment and internal regulations as provided for  by law for the implementation of banking operation specified in the  Permit. 
  3. For banking operations related to the foreign exchange, the financial  company must comply with regulations of law on management of  foreign exchange. 
  4. Fulfilling the operational conditions for banking operation stipulated  by the State Bank. 

One of the new remarkable points of this Decree is detailing the conditions for  the financial company to be entitled to issue credit cards such as the compliance  with the prudential ratios in banking operations; debt classification and continuous appropriation of risks in all quarters of the preceding year of the  proposal for operation supplementation; Bad debt ratio below the level  provided by the State Bank; Not being sanctioned for administrative violations  in the field of money and banking for 01 year from the time of request for  additional operation backwards; Business operation with continuous profit at  least in 02 years preceding the year proposed for additional operation; Having a  minimum time of operation and plan for the issuance of credit cards as  stipulated by the State Bank. 

Factoring financial company and financial company for consumer credit shall  not carry out these following activities: Underwriting of issue of corporate  bonds and trading of corporate bonds; Receipt of entrusted capital of the  Government, organizations and individuals to carry out investment activities in  business and production projects; Entrustment of capital for other credits  institutions to carry out the credit granting; 

For the financial company and the financial leasing company that have been  established and are operating under the Permit issued by the State Bank before  the effective date of this Decree, this Decree specifies that the above mentioned  company must ensure all conditions specified for the conditional activities as  provided in this Decree within 12 months from the effective date of this  Decree. 

Particularly, the consolidated financial company and the financial company for  consumer credit and the financial leasing company that have been established  and are operating under the Permit issued by the State Bank before the effective  date of this Decree which have activities prohibited by this Decree must stop  such activities within 18 months, from the effective date of this Decree. 

The Decree takes effect on 25th  June, 2014