The Governor of the State bank of Vietnam promulgates Circular No. 02/2017/TT-NHNN on factoring services provided by credit institutions and branches of foreign banks.
Pursuant to the Law on credit institutions, this Circular and relevant law provisions, each factor shall promulgate internal regulations on factoring services, management of accounts receivable and accounts payable in conformity with its operating activities (hereinafter referred to as factoring internal regulations).
Factoring internal regulations of a factor shall be consistently complied with in the whole of factor system and contain at least the following:
a) Conditions for factoring; accounts ineligible for factoring; methods of factoring; interest rates, factoring charges and methods of determining interests and factoring charge; factoring documentation and documents sent from the client to the factor; debt recovery, recourse; conversion to overdue debt;
b) procedures for verification, approval, decisions on factoring; in which specifying the time limit for verification or decision on factoring; decentralization, authorization and responsibilities of each individual and division relating to verification, approval, decision on factoring and other tasks to be performed in factoring services.
c) Procedures for inspection and supervision of the factoring process and client’s repayment; decentralization, authorization and responsibilities of each individual and division relating to inspection and supervision of the factoring process and client’s repayment;
d) Using security interests in factoring services, verification of collateral, management, supervision of collateral in conformity with security interests, characteristics of collateral and client;
dd) Termination of factoring, debt settlement; remission of interests and fees;
e) Identification of risks likely incurring in the factoring process; procedures for monitoring, evaluating, and control risks; risk reduction plan;
g) Measures for risk management in a case where the buyer has not provided a commitment to make payment to the factor (in case of factoring requested by seller). Measures for inspection, supervision, and management if no original of contract or documentation for sale of goods or supply of services is not used.
h) A list of or standards applied for organizations that provide payment guarantees and insurance for accounts payable prescribed in Point c(ii) Clause 2 Article 11 of this Circular.
Within 10 working days from the date on which new factoring internal regulations are promulgated or applicable factoring internal regulations are amended, the factor shall forward them to Bank Supervision and Inspection Agency affiliated to the State bank of Vietnam.
This Circular comes into force from September 30, 2017.
From the effective date of this Circular, the following documents shall become expired:
Decision No. 1096/2004/QD-NHNN dated September 6, 2004 of the Governor of the State bank of Vietnam on promulgation of regulations on factoring services provided by credit institutions.
Decision No. 30/2008/QD-NHNN dated October 16, 2008 of the Governor of the State bank of Vietnam on amendments to regulations on factoring services provided by credit institutions which are issued together with Decision No. 1096/2004/QD-NHNN dated September 6, 2004 of the Governor of the State bank of Vietnam;
Article 8 of Circular No. 24/2011/TT-NHNN dated August 31, 2011 of the Governor of the State bank of Vietnam on enforcement of plan for simplifying administrative procedures for establishment and operation of banks according to Resolutions of the Government on simplifying administrative procedures under the management of the State Bank of Vietnam;
Article 2 and Clause 2 Article 3 of Circular No. 14/2016/TT-NHNN dated June 30, 2016 of the Governor of the State bank of Vietnam on amendments to Circular No. 30/2014/TT-NHNN dated November 6, 2014 of the Governor of the State Bank on authorization and of credit institutions, branches of foreign banks and repealing a number of articles of regulations on factoring services of credit institutions enclosed together with Decision No. 1096/2004/QĐ-NHNN dated September 6, 2004 of the Governor of the State Bank.