Bank of Tokyo-Mitsubishi Gets Nod for Factoring Service

The Bank of Tokyo-Mitsubishi has been allowed by Vietnam’s central bank to offer factoring services, becoming the fourth bank to provide such a service in the country to date.

 

Under Decision No.817/QD-NHNN, the Japanese bank will supply the service from December 12 in its two branches in Hanoi and Ho Chi Minh City.

 

Reportedly, the factoring service details that after making a sale, the seller will issue an invoice requesting the buyer to make payment for the delivered goods on a certain date and the supplier will then sell the invoice to a bank for a certain amount, the bank will then collect the debt from the buyer when it falls due.

 

Thus, the new service not only helps meet enterprises’ demand for capital and increases their liquidity but also minimizes risks associated with receive goods, experts said.

 

In addition, the factoring service is also considered to be an effective financial instrument with many advantages, especially in an integrating economy like Vietnam where demand for working capital and collection and risk management services is increasing.

 

Apart from Tokyo-Mitsubishi Bank, three other banks including Techcombank, Sacombank and Citibank are also providing this kind of banking service.

 

The Bank of Tokyo-Mitsubishi, Ltd is a member of the Mitsubishi UFJ Financial Group (MUFG) and has been present in Vietnam for several years.

 

At present, five State-run commercial banks, 38 joint stock commercial banks, four joint venture banks, 29 foreign bank branches, 45 foreign bank representative offices, five finance companies and nine finance leasing firms are operating in Vietnam.