Join Le Hong Phong High School to find out what is a financial company? Characteristics and activities of financial companies.
At present, along with the development of the country’s economy. Financial companies and banks developed very strongly. Along with the development of the internet, financial services are increasingly developed and favored by customers. Maybe everyone hears a lot of the term “finance”, but not everyone understands what it is? Through this article, let’s learn what a financial company is and what you need to know about it.
What is a financial company?
According to the Law on Credit Institutions, a financial company is an enterprise in the form of a credit institution but not a bank. Or they call it non-bank. The company has the function of mobilizing capital, lending for personal consumption, providing financial and monetary services. However, a financial company may not provide payment services and receive deposits for less than 1 year.
Financial companies are established in the following forms: joint stock companies, enterprises, companies owned by individuals or credit institutions.
In addition, foreign credit institutions. Companies with 100% foreign capital can register to establish a financial operation company. Some leading financial companies in Vietnam such as FE with cash loan products FE Credit, Home Credit, ACS.
Characteristics of financial companies operating in Vietnam
Legal capital level
Like banks, financial companies must also have legal capital in accordance with the provisions of the law upon establishment. The legal capital of these non-banking organizations is lower than that of commercial banks.
The law stipulates that a financial company must have a legal capital of VND 500 billion if established after 2018. Before 2018, the legal capital is VND 300 billion.
Types of activities of financial companies
Previously included: State-owned companies, capital investment and business organization. Finance joint stock company, established by individuals and organizations jointly contributing capital in accordance with the law. The company operates finance directly under the credit institutions. The company in this form is established by a credit institution with its own capital.
Financial joint venture company, established by capital contribution between Vietnam and foreign countries on the basis of a contract. Financially operating company with 100% foreign capital, established from overseas capital in accordance with the law.
Currently, there are only 3 types of companies: one-member limited liability financial companies ( FE Credit ), two or more members and shares. Regardless of foreign or domestic capital.
Regarding the field of operation, financial companies mainly operate in the form of calling for capital. This is an important factor, potentially affecting the stability and development of the company. Fundraising activities include:
- Receive deposits from individuals or organizations for 1 year or more according to regulations from the state bank.
- Receiving entrusted capital from domestic and foreign individuals and organizations and the government.
- Issuing promissory notes, bonds and certificates of deposit and other valuable papers to mobilize capital at home and abroad.
- Borrow money from domestic and foreign credit and financial institutions or borrow money from international financial institutions.
Besides, lending activities also contribute a lot such as:
- Borrowing short-term, medium-term and long-term according to regulations of the State bank.
- Consumer loans through installment loans
- Loans under the mandate of the Government or individuals and organizations at home and abroad.
In addition, the company operating in the financial sector also participates in the activities of discounting, rediscounting, pledging commercial papers and other valuable papers:
- Financial companies provide credit to organizations or individuals in the form of discounts and brand pledges.
- The company operates in finance and other credit institutions such as rediscounting and pledging commercial paper.
The financial company is guaranteed based on its reputation and financial ability to the guarantee recipient. The following types of guarantees are available:
- Loan guarantee.
- Payment guarantee.
- Tender guarantee.
- Contract performance guarantee.
- Product quality guarantee.
- Advance payment guarantee.
- Reciprocal guarantee.
- Guarantee confirmation
According to current regulations, financial companies can also perform the following activities:
- Contribute capital to buy shares for credit institutions or businesses
- Investment activities
- Join the currency market
- Trading in gold, performing remittance services
- Providing consulting services related to finance, currency, banking, investment
- Providing services of preserving precious objects, renting safes, pawns, valuable papers.
- Being allowed to become an agent to issue bonds, stocks and other valuable papers for companies and enterprises.
- Be entitled to receive entrustment, become an agent in the fields related to finance and banking, insurance, investment, asset management, investment capital of individuals and organizations under contract.
Financial company operating time
Companies operating in the financial sector, with a maximum operating period of 50 years. If you want to extend it further, you must be approved by the State Bank, the extension time should not exceed 50 years.
Unable to repay the debt of a financial company due to the impact of the epidemic, what should the borrower do?
The Covid-19 pandemic with complicated developments is having a strong impact on the employment situation of people for more than a year. According to a report by the General Statistics Office, in the second quarter of 2021, there were 12.8 million people aged 15 and older who were negatively affected by the Covid-19 epidemic, including those who lost their jobs and had to take time off work. alternate leave, reduced working hours, reduced income… The number of employees aged 15 years and over in the second quarter of 2021 was 49.9 million, a decrease of 65,000 compared to the previous quarter.
Talking to us, Lawyer Do Thanh Trung, Director of NewKey law firm, said that there are a number of credit institutions that have implemented programs to provide options for customers such as loan restructuring, delay payment as well as waiving late fees.
Therefore, customers and borrowers need to understand the interest reduction policy, debt structure of each credit institution as specified in the above documents and need to contact the credit institution directly for guidance. to guide and settle according to competence.
Lawyer Do Thanh Trung said that the situation of the Covid-19 epidemic can be considered as a force majeure case and now the State also has specific policies to remove difficulties for people and businesses. pandemic.
The consideration and rescheduling of debt payment terms, interest exemption and reduction, etc. fall under the competence of the credit institution.
Can borrowers who intentionally evade debt be considered for criminal prosecution?
In addition, borrowers who deliberately evade debt may be considered for criminal prosecution for the crime of “abusing trust to appropriate property” as specified in Article 175 of the Penal Code 2015.
|Specifically, Article 175 of the 2015 Penal Code stipulates: “1. Those who commit one of the following acts to appropriate other people’s property valued from VND 4,000,000 to under VND 50,000,000 or under VND 4,000,000 but have been administratively sanctioned for acts of appropriating has obtained or has been convicted for this crime or for one of the crimes specified in Articles 168, 169, 170, 171, 172, 173, 174 and 290 of the Penal Code, has not yet been expunged, but continues to commit it. or property that is the victim’s main means of livelihood or property of special spiritual value to the victim, shall be sentenced to non-custodial reform for up to 3 years or a prison term of between 6 months and 3 years. year:
a) Borrowing, borrowing or renting property of another person or receiving another person’s property in the form of a contract and then using fraudulent tricks to appropriate that property or on time to return the property, even though there are conditions; , the ability but deliberately do not pay;
b) Borrowing, borrowing, renting property of another person or receiving another person’s property in the form of a contract and using such property for illegal purposes leading to the inability to return the property.
2. Committing the crime in one of the following circumstances, the offenders shall be sentenced to between 02 and 07 years of imprisonment:
b) Be of a professional nature;
c) Appropriating property valued between VND 50,000,000 and under VND 200,000,000;
d) Abusing positions, powers or taking advantage of the name of agencies or organizations;
d) Using cunning tricks;
e) Dangerous recidivism.
3. Committing the crime in one of the following circumstances, the offenders shall be sentenced to between 5 and 12 years of imprisonment:
a) Appropriating property valued between VND 200,000,000 and under VND 500,000,000;
b) Causing adverse effects on social security, order and safety.
4. Committing the crime of appropriating property valued at VND 500,000,000 or more, the offenders shall be sentenced to between 12 and 20 years of imprisonment.
5. The offenders may also be subject to a fine of between VND 10,000,000 and 100,000,000, a ban from holding certain posts, practicing certain professions or doing certain jobs for 1 to 5 years, or having part or part of it confiscated. entire property.
Through the above article, Le Hong Phong High School has helped you understand what a financial company is? Characteristics and operation of financial companies in Vietnam. You can visit Le Hong Phong High School’s website to find out good and useful articles for your exam process.
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