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Vietnam central bank issues draft rules for nonbanking financial firms

Vietnam's central bank is proposing to allow nonbanking financial companies, or NBFCs, to open up to three new branches in a fiscal year, Viet Nam News reported May 29.

New rules drafted by the State Bank of Vietnam would allow NBFCs with less than one year of operations to open up to two branches. Firms with more than a year of operations will be allowed to open a maximum of three branches in a year.

NBFCs include general financial companies, factoring companies, consumer lending companies and financial leasing companies.

At the same time, the companies are required to comply strictly with rules on debt classification, risk provisioning and on the ratio of bad debt to total outstanding loans of under 3% as set by the central bank in each period.

The draft rules require an NBFC to have a minimum operation duration of three years and more than 20 trillion dong of assets if it wants to set up a branch overseas, among others.

The central bank is seeking comments on the draft regulations.

As of May 29, US$1 was equivalent to 22,741 Vietnamese dong.