Decision No. 177/QD-NHPT Issuing the Provision on the Supply and Use of Cheques within Vietnam through the Vietnam Development Bank

DECISION

Issuing Regulations on Supplying and Using Cheques within Vietnam through the Vietnam Development Bankwithin the country through the Vietnam Development Bank

___________________

DIRECTOR OF THE VIETNAM DEVELOPMENT BANK

WHEREAS, pursuant to the Law on Transfer Instruments 2005;

WHEREAS, pursuant to Decision No. 108/2006/QD-TTg dated May 19, 2006 of the Prime Minister on the establishment of the Vietnam Development Bank;

WHEREAS, pursuant to Decision No. 110/2006/QD-TTg dated May 19, 2006 of the Prime Minister approving the Charter of Organization and Operation of the Vietnam Development Bank;

WHEREAS, pursuant to Decision No. 30/2006/QD-NHNN dated July 11, 2006 of the Governor of the State Bank of Vietnam on issuing the regulations on supplying and using cheques;

WHEREAS, pursuant to Decision No. 40/QD-HĐQL dated December 29, 2006 of the Management Board on issuing the operational regulations for domestic payments through the Vietnam Development Bank;

CONSIDERING the proposal of the Chief Accountant and Head of the Finance and Accounting Department, Cashier of the Vietnam Development Bank.

DECISION

Article 1. This Decision hereby promulgates the Regulations on Supplying and Using Cheques within Vietnam through the Vietnam Development Bank (VDB).

Article 2. This Decision takes effect from May 1, 2007. Heads of units under and affiliated with VDB are responsible for implementing this Decision.

 

REGULATIONS ON SUPPLYING AND USING CHEQUES IN VIETNAM

THROUGH THE VIETNAM DEVELOPMENT BANK

(Issued together with Decision No. 177/QD-NHPT dated April 27, 2007 of the Director of the Vietnam Development Bank)

dated April 27, 2007 of the General Director of the Vietnam Development Bank)

 

PART I
GENERAL PROVISIONS

Article 1. Scope of Application.

1. These regulations stipulate and guide certain aspects of cheque supply and usage activities including:

a. Procedures for supplying, issuing, transferring, guaranteeing payment, making payment, and pursuing cheques supplied by VDB.

b. Control, circulation, processing of documents, and accounting related to cheque payments issued by organizations providing payment services operating within Vietnam at VDB.

c. Handling violations in cheque payments.

2. Other aspects related to cheques not mentioned herein shall be implemented according to the Law on Transfer Instruments 2005 and Decision No. 30/2006/QD-NHNN dated July 11, 2006 of the Governor of the State Bank of Vietnam on issuing regulations on supplying and using cheques (hereinafter referred to as Decision No. 30).

3. In cases where VDB and other organizations providing payment services have signed separate agreements on cheques, they shall implement such agreements and follow VDB's guidance.

Article 2. Scope of Application.

1. The main office, Branch I, and branches of VDB (hereinafter referred to as Branches) have the function of collecting and paying cheques.

2. Customers using cheques supplied by VDB, requesting VDB to collect cheques on their behalf, and customers using other payment services related to cheques provided by VDB.

Article 3. Interpretation of Terms.

In this regulation, the following terms shall be understood as follows:

1. Branch: Includes units with payment functions within the system of Vietnam Commercial Joint Stock Bank (Head Office, Trading Branches, Branches of Vietnam Commercial Joint Stock Bank).

2. Suspension of Cheque Payment: Is the act of the drawer notifying in writing to the drawee to not pay the cheque issued by themselves.

3. Vietnam Development Bank: Depending on the case, it refers to the Head Office, Trading Branch, or Branch.

4. Drawee: Is the entity responsible for paying the amount recorded on the cheque at the instruction of the drawer, which is the service provider organization offering payment services where the drawer has an account and is provided with cheques.

5. Drawer: Is the person who establishes and issues a cheque to instruct the drawee to pay the amount recorded on the cheque on their behalf.

6. Collecting Agent: Is a bank or service provider organization permitted by the State Bank of Vietnam to perform cheque collection services.

7. Beneficiary: Is the holder of the cheque in one of the following capacities:

a. The person designated by the drawer to receive the payment amount recorded on the cheque.

b. The person receiving the transfer recorded on the cheque according to the transfer methods stipulated in the Law on Transfer Instruments 2005.

c. The holder of the cheque marked "pay to the bearer."

8. Issuance: Is the act of the drawer establishing and transferring the cheque for the first time to the beneficiary.

9. Cheque: Is an order to pay money from an account, established in accordance with legal regulations and according to the form prescribed by the Vietnam Commercial Joint Stock Bank, requiring the Vietnam Commercial Joint Stock Bank to deduct a certain amount from the drawer's payment account to pay the named beneficiary on the cheque or pay the bearer of the cheque.

10. Guaranteed Cheque: Is a cheque that the drawee confirms to guarantee payment when the cheque is presented for payment within the presentation period.

11. Account Payable Cheque: Is a cheque that records the phrase "Pay only to the account" of the beneficiary or does not record "Pay only to the account" but the beneficiary receives the payment by transfer.

12. Cash Payable Cheque:Is a cheque that does not record the phrase "Pay only to the account," allowing the beneficiary to receive the payment by cash.

13. Presentation Period: Is the period calculated from the date of issuance recorded on the cheque to the date when the cheque is presented for payment at the payment location.

14. Service Provider Organization: Are organizations permitted to perform payment services in accordance with Decree No. 64/2001/ND-CP dated September 20, 2001, of the Government on payment activities through service provider organizations.

15. Insufficient Funds Cheque: A cheque presented within the presentation period where the available balance on the drawer's payment account at the drawee is insufficient to cover the full amount recorded on the cheque is considered an insufficient funds cheque.

Other terms are understood according to the provisions of the Law on Transfer Instruments 2005.

Article 4. Responsibilities of the Head Office.

Design the cheque form in compliance with Articles 58 and 59 of the Law on Transfer Instruments 2005 and Decision No. 30/2006/QD-NHNN dated July 11, 2006, of the Governor of the State Bank of Vietnam.

Register the blank cheque form according to Decision No. 30/2006/QD-NHNN dated July 11, 2006, of the Governor of the State Bank of Vietnam.

Organize printing and distribution of blank cheques to branches.

Notify relevant parties (including participating service provider organizations performing cheque collection services, Cheque Clearing Center) about the blank cheque form of the Vietnam Commercial Joint Stock Bank.

Guide and inspect branches in the implementation of related transactions concerning the use of cheques supplied to customers.

Article 5. Responsibilities of the Branch Director.

1. Organize the implementation and inspection of the supply, use, and settlement of Cheques at the unit.

2. Inform and disseminate to customers to comply with current laws and regulations of the State Bank of Vietnam (posted at the counter, printed in leaflets guiding the use of Cheques).

3. Bear responsibility for compensation when violating regulations on controlling Cheques leading to abuse and loss of assets.

4. Register and assign staff to use the credit information software program of the State Bank of Vietnam to enter and effectively exploit information on Cheques that are not capable of payment and have been refused payment, and issuers who violate the rules at the website http://www.creditinfo.org.vn on the Cheque payment page.

Article 6. Obligations of the Issuer.

1. Ensure sufficient funds available from the deposit account (available balance) at the Branch to cover the full amount recorded on the Cheque for the beneficiary at the time of presentation for payment.

The available balance is determined as follows:

 

 

3. In cases where Cheques are refused payment due to insufficient funds, the issuer must unconditionally repay the amount claimed on the Cheque to the beneficiary.

4. Be responsible for all damages caused by their own fault or allowing Cheques to be abused.

5. Comply strictly with legal provisions and regulations of the State Bank of Vietnam regarding the supply and use of Cheques.

Article 7. Recovery of Unpaid Cheques.

 

1. In cases where Cheques are refused payment in whole or in part according to the provisions, the beneficiary has the right to recover the lawful amount they are entitled to. The objects, amounts, methods, and procedures for recovery shall be applied similarly to the provisions from Article 48 to Article 52 of the Law on Transferable Instruments 2005.

2. A transferee who has paid money to the beneficiary has the right to recover from the issuer or the previous transferee.

Article 8. Issuing and Paying Cheques in Foreign Currency.

1. Issuing Cheques in foreign currency:

If the Cheque issuer uses a foreign currency deposit account in accordance with the law on foreign exchange management, they may issue foreign currency Cheques from their deposit account to pay the beneficiary.

2. Paying Cheques in foreign currency:

a. Cheques payable in foreign currency are settled in the foreign currency recorded on the Cheque when the final beneficiary is permitted to receive foreign currency under the law on foreign exchange management.

b. Cheques payable in foreign currency but the final beneficiary is not permitted to receive foreign currency under the law on foreign exchange management, then the amount recorded on the Cheque is settled in Vietnamese Dong at the selling exchange rate published by the State Bank of Vietnam at the time of settlement.

3. To facilitate the settlement of foreign currency Cheques in cases where there is no organization for foreign currency Cheque settlement and the drawee and the collecting agent are two different service providers without agency relations, the collecting agent must provide specific instructions for settlement to the drawee on the Cheque submission form.

3. To facilitate the payment of foreign currency checks in cases where there is no organization for foreign currency check clearing and both the drawer and the collecting organization are two different payment service providers without agency relationships, the collecting organization must provide specific payment instructions to the drawer on the check deposit slip.

Chapter II
CHECK SUPPLY

Article 9. White Cheque Template.

1. The State Bank shall decide on the design of the White Cheque template to supply to customers based on compliance with legal regulations and the State Bank's provisions.

2. Branches shall use the new White Cheque template printed and distributed uniformly by the State Bank to supply to customers.

3. The new White Cheque template of the State Bank shall be applied from the date 01/05/2007 according to the attached model (model number 01).

 

Article 10. Registration of White Cheque Templates.

Prior to printing White Cheques according to the new model, the Head Office of the State Bank must register the White Cheque template with the National Bank of Vietnam (Settlement Department).

 

 Article 11. Printing, Supplying, Monitoring, and Storing White Cheques at the State Bank.

Shall be implemented in accordance with Decision No. 658/QĐ-NHPT dated December 29, 2006 issued by the General Director of the State Bank stipulating the handover and storage of important seals of the State Bank.

Article 12. Supplying White Cheques to Customers.

1. Conditions for customers to be supplied White Cheques by the State Bank.

a. Having a current account for settlement and using it at the State Bank.

b. Not being prohibited from using Cheques or not currently suspended from issuing Cheques.

2. Quantity of White Cheques sold to each customer at one time: Sold according to the customer's request but not exceeding two books (20 sheets) per customer.

3. Procedures for supplying Cheques:

a. When there is a need to use Cheques, the account holder, legal representative, or authorized person of the account holder shall prepare a request for Cheque supply (model number 02) and submit it to the Branch.

b. Upon receiving the request for Cheque supply, the Branch shall be responsible for checking the conditions of the person requesting the Cheques and the identification documents of the recipient (ID card, passport still valid, military ID, public security personnel ID, or other identification documents with a photo and a stamp).

To obtain additional information about the customer's compliance with cheque payment discipline before deciding to sell White Cheques, the Branch shall retrieve this information through the Credit Information Center of the National Bank.

c. Before delivering Cheques to customers, the Branch supplying Cheques shall perform the following actions:

- Enter information about the Cheques sold to the customer.

- Open a record book for Cheque supply (model number 12) to monitor the quantity of Cheques supplied and the signatories of the White Cheques.

- Print, emboss, or pre-fill the contents of the elements: Name, account number of the issuer; name, address of the Branch of the State Bank where the issuer has an account on each Cheque.

d. The Branch shall require customers to count the Cheques before signing for them: The quantity of Cheques, the elements on the surface of each Cheque.

 

Article 13. Responsibilities of the Person Receiving Cheques:

1. The person receiving Cheques must count the number of Cheques and verify the accuracy of the elements on the supplied Cheques; if there are errors, they must immediately report to the Branch supplying the Cheques to exchange for another Cheque.

2. After receiving White Cheques from the Branch supplying the Cheques, if any errors occur or the Cheques are misused, the account holder shall bear full responsibility for any resulting losses.

Chapter III
CONTENT OF THE CHEQUE AND ISSUING A CHEQUE

Article 14. Content on the Cheque.

The content of the Cheque includes the content printed by the State Bank called the White Cheque and the content added during the issuance of the Cheque.

Article 15. Issuing a Cheque:

1. The issuer of the Cheque must fill out the pre-printed form provided by the State Bank; if the Cheque is filled out on a non-State Bank White Cheque, the Branch may refuse to process that Cheque.

2. The elements on the Cheque, apart from those printed by the State Bank, must be clearly printed or written in ink or ballpoint pen, not pencil or red ink, without corrections or erasures. The writing when issuing a Cheque must be in Vietnamese. In cases where the Cheque contains foreign elements, the Cheque may use a foreign language as agreed upon by the parties.

3. Date of issuance: Is the date recorded by the issuer on the Cheque, written in numerical order day-month-year (DD-MM-YYYY).

4. Designation of the payee (pay to): Recorded as follows:

a. For a specific person and not allowing transfer by marking the "Not Negotiable" instruction on the front of the Cheque (see example 01 model number 1).

b. Pay to a specific person and allow transfer by clearly recording the name of the payee and not marking the "Not Negotiable" instruction (see example 3 model number 1).

c. Pay to the bearer by recording the phrase "Pay to the bearer" or not recording the name of the payee (see example 2 model number 1).

d. If the payee does not have a deposit account, record the ID number or passport number still valid, issue date, and place of issue immediately after the payee's name (see example 01 model number 1).

5. A Cheque can be issued to instruct the payor to pay the amount stated on the Cheque to the issuer.

6. To designate that the amount on the Cheque cannot be paid in cash but must be transferred to the payee's account, the issuer or transferee marks the "Pay to Account Only" box on the front of the Cheque (see example 03 model number 1).

7. If the Cheque does not contain the phrase "Pay to Account Only," the payor shall pay the payee in cash if requested by the payee. This phrase is effective for any payee of the Cheque.

8. Crossed Cheque:

a. To designate that the amount on the Cheque can only be paid to a service provider or to a payee with an account at the payor, the issuer or transferee draws two parallel lines across the top right corner of the Cheque (see example 03 2 model number 01).

b. To designate that the amount on the Cheque can only be paid to a specific bank or to a payee with an account at that bank, the issuer or transferee draws two parallel lines across the top right corner of the Cheque and writes the name of the designated bank between the lines. A Cheque with the names of two banks between the lines is not payable unless one of the two banks named between the lines is a collecting bank (see example 4 2 model number 01).

9. In case the person signing the Cheque is authorized by the account holder, the account holder must complete all procedures for notification, registration of the sample signature, and setting the limit with the Branch of the Commercial Bank.

10. The amount recorded in figures and in words must match exactly. If the amount recorded in figures differs from the amount recorded in words, the Cheque will not be valid for payment.

The amount in figures on the Cheque shall be Arabic numerals: 0, 1, 2, 3, 4, 5, 6, 7, 8, 9; a period (.) shall be placed after thousands, millions, billions, ten billions, hundred billions, and trillion digits; a comma (,) shall be placed after the unit digit when there are additional digits following it. For foreign currency Cheques, the amount in figures may be recorded according to international practice.

The amount in words must be clearly written, the first letter of the amount in words must be capitalized and written at the beginning of the first line without skipping lines or spaces between letters, and no additional characters (on a new line) can be added between two consecutive letters on the Cheque. The amount in words should be written in accordance with the common way of expressing quantity and monetary units rather than the numerical value. For example, the amount is: 423,543 VND; it should be written in words as "Four hundred twenty-three thousand five hundred forty-three dong." It should not be written as "four two three five four three dong."

11. The name of the payee is the name of the Branch of the Commercial Bank responsible for paying the amount recorded on the Cheque according to the order of the drawer.

12. The place of payment is where the Cheque is presented for payment and is determined by the payee. If the place of payment is not indicated on the Cheque, it is understood that the Cheque is presented for payment at the business location of the payee, specifically:

a. For Cheques provided by the Commercial Bank, the place of payment for the Cheque is all transaction points of the Commercial Bank.

b. For Cheques not provided by the Commercial Bank, the place of payment may be the address of the payee or a service provider organization acting as an agent for collecting Cheques on behalf of the payee. If the address of the payee is unclear, the Cheque shall be presented for payment at the main office of the payee.

13. The signature of the drawer must be a handwritten signature directly on the Cheque using ink or ballpoint pen according to the registered sample signature at the payee, accompanied by the name of the drawer and a stamp (for Cheques signed by a representative of an organization).

14. Chief Accountant: Applies to Cheques drawn by a legal entity and registered with the Branch. The Chief Accountant must sign directly on the Cheque using ink or ballpoint pen according to the registered sample signature at the Branch.

Chapter IV

TRANSFER, ASSIGNMENT OF CHEQUES FOR COLLECTION

Article 16. Transfer of Cheques.

1. The transfer of Cheques shall be governed by the provisions on the transfer of promissory notes under Section IV, Chapter II of the Law on Transferable Instruments 2005, except for the assignment of Cheques to the Commercial Bank for collection.

2. The transfer of Cheques shall be evidenced on the back of the Cheque. A Cheque that has been transferred shall have a continuous chain of endorsement signatures as follows: in the first transfer transaction of the Cheque, the endorser's name must be the name of the payee recorded on the front of the Cheque; in the second transfer transaction of the Cheque, the endorser's name must be the name of the person who was endorsed in the first transfer transaction; and so on until the final transfer transaction.

3. If the name of the endorser in any transfer transaction is not the name of the person who was endorsed in the immediately preceding transfer transaction, then that chain of endorsement signatures is not continuous.

4. The payee of a Cheque that has been transferred through endorsement is the last person in the continuous chain of endorsement signatures as stipulated in Clause 2 of this Article.

When the Branch pays a Cheque that has been transferred through endorsement, it has the responsibility to check the continuity of the chain of endorsement signatures to ensure that the amount on the Cheque is paid to the correct payee.

Article 17. the State Bank Endorsing a Cheque for collection, endorsing a Cheque to a collection agent is a service provider organization.

1. To be paid the amount on the Cheque, the payee of the Cheque may assign the Cheque for collection by endorsing it to the Branch (the collection agent) for collection according to the agreement between both parties. The Branch has the right to decide whether to pay the endorsee for collection immediately or to pay after receiving the result of the Cheque's payment from the drawee, based on its own responsibility for the Cheque's payment ability and the ability to recover the amount on the Cheque in case the Cheque is not paid.

2. In cases where it cannot be presented directly at the specified place of payment, the Branch has the right to further assign the Cheque to another collection agent, which is a service provider organization with which it has an agency relationship according to the agreement between both parties, for that collection agent to present the Cheque.

Chapter V
GUARANTEED CHEQUE PAYMENT

Article 18. Guaranteeing a Draft.

1. When there is a need to guarantee a draft, the drawer (the person requesting the guarantee for the draft) shall submit the completed draft and a request for guarantee to the Branch. To implement the guarantee, the draft must meet the following conditions:

a. It must be fully and clearly filled out according to the provisions set forth in Chapter III of this regulation.

b. The drawer must have sufficient funds in their account to ensure the ability to pay the amount stated on the draft, or if there are insufficient funds in the account but the drawee has agreed to allow the drawer to overdraw up to a certain limit to ensure the ability to pay the amount stated on the draft.

c. The drawer must prepare a request for guarantee of the draft (Form No. 03).

2. The drawee may refuse to guarantee the draft if the draft does not meet one of the conditions stipulated in Clause 1 of this Article.

3. Procedures for guaranteeing a draft:

The drawer prepares and submits two copies of the "Request for Guarantee of Draft" and the fully completed draft with signatures and stamps (if any) on the front of the draft to the Branch. The Branch will check, compare, and verify the conditions for implementing the guarantee of the draft as prescribed in Clause 1 of this Article. If all conditions are met, the Branch will process as follows:

- Record the date, month, year, and sign and stamp of the Branch in the Guarantee section on the front of the draft.

- Hand over the draft that has completed the guarantee procedures to the customer.

Process the copies of the Request for Guarantee of Draft as follows:

- One copy of the Request for Guarantee of Draft serves as the debit voucher for the drawer's settlement account, while simultaneously recording the credit to the account used to secure payment of the draft.

- One copy of the Request for Guarantee of Draft serves as the notice of debit given to the drawer of the draft.

4. Once the draft has been guaranteed, the Branch is only responsible for ensuring the ability to pay the amount stated on the draft until the presentation period of the draft expires.

5. After the presentation period has expired and the draft has not yet been presented for payment, the drawer has the right to request the Branch to terminate the temporary retention of the funds used to secure the payment of the draft.

6. The guarantee period for the draft shall not exceed six months or the permitted overdraft period if the overdraft is used to guarantee the draft.

Article 19. Draft Guarantee.

1. A draft guarantee is the act of a third party (hereinafter referred to as the guarantor) committing to the beneficiary to pay the full or partial amount stated on the draft when the guaranteed party fails to pay or pays insufficiently the amount stated on the draft.

2. To guarantee a draft, the guarantor must write the phrase "guarantee," the guarantee amount, the guarantor's name, address, signature, and the name of the guaranteed party on the front of the draft or on an attached document. In cases where the guarantee does not specify the name of the guaranteed party, the guarantee is considered to be for the drawer.

3. After fulfilling the guarantee obligation, the guarantor may take over the rights of the guaranteed party against those related to the draft, handle the collateral of the guaranteed party, and have the right to demand the guaranteed party, the drawer, and those responsible for the guaranteed party to fulfill the obligation to repay the amount of the guarantee paid.

Chapter VI
PRESENTATION AND PAYMENT OF DRAFT

Article 20. Presentation of Cheque.

 A cheque shall be deemed to have been "presented" if the cheque, in paper form (in the case of payment processing using paper instruments) or electronic data of the cheque (in the case of electronic payment processing), has reached the presentation location specified in Article 21 of Chapter VI of these Regulations.

1. A cheque must be presented within thirty days from the date of issue.

2. The beneficiary may present the cheque for payment later than the prescribed period if the delay in presentation is due to force majeure or other objective impediments. The duration of such force majeure or objective impediments shall not be counted towards the presentation deadline if there is confirmation from the competent authority where the event occurred.

3. If a cheque is presented within the presentation period and the issuer has sufficient funds to pay the amount stated on the cheque, the Branch shall be responsible for paying the beneficiary or the person authorized by the beneficiary immediately on the day of presentation or on the next working day following the day of presentation.

4. If a cheque is presented for payment after the presentation period but not more than six months from the date of issue, the Branch may still make payment if it does not receive a notice to stop payment for that cheque and the issuer has sufficient funds to pay.

5. The beneficiary may present the cheque for payment through a public postal guarantee service. The time of presentation for payment shall be determined according to the postmark date of the sending post office.

6. In the case where a cheque is presented for payment before the issue date recorded on the cheque, payment can only be made from the issue date on the cheque.

Article 21. Presentation Location.

The beneficiary or the person authorized by the beneficiary, or the collecting agent, shall present the cheque at the following locations:

1. The payment location recorded on the cheque;

2. If the cheque does not record a payment location, it shall be presented at the business location of the drawee;

3. In the case where the presenter of the cheque is a service provider organization, in addition to the above presentation locations, the organization may present the cheque at the Payment Clearing Center if the organization is a direct member of the Payment Clearing Center.

4. For cheques provided by the State Bank, the presentation location is all branches of the State Bank.

Article 22. Payment of Cheque Provided By the State Bank supply.

1. Documents Required for Presentation:

To be eligible for cheque payment, the beneficiary or the person authorized or the collecting agent must present the following documents:

a. For cash cheques (cheques without the wording "pay to account"):

- The cheque.

- Valid identification card or passport of the person receiving cash matching the information on the cheque.

b. For transfer cheques:

- The cheque.

- Three copies of the Deposit Slip (Form No. 04) prepared separately for each currency.

2. Procedures for Checking and Accepting Cheques at the Branch:

a.  The person requesting payment is the lawful beneficiary of the cheque as stipulated in Point 7 of Article 3 of these Regulations (in the case where the beneficiary directly presents the cheque).

 b. The cheque is issued on the blank cheque form provided by the State Bank and filled out with all required elements as prescribed. 

c. The cheque is presented within the presentation period for payment. If the cheque is presented after the presentation period for payment but not more than six months from the date of issue, the Branch may still make payment if it does not receive a notice to stop payment for that cheque and the issuer has sufficient funds in their account.

d. The signature and stamp (if any) of the cheque issuer or the authorized person issuing the cheque matches the registered sample at the Branch.

đ.  The cheque is not issued beyond the authority prescribed in the power of attorney for cheque issuance.

e. The continuity of the endorsement chain (if the cheque has been endorsed) on the cheque.

g. There are no alterations or erasures on the cheque.

h.  Cross-checking to ensure that the cheque number, amount on the cheque match the amount and type of currency listed on the deposit slip.

i. Summing up the total amount on the deposit slip, the written amount must match the numerical amount.

k. Other relevant factors as prescribed.

Upon discovering errors in the deposit slip or if the cheque lacks any of the conditions mentioned above, the Branch must return the cheque to the depositor and request them to prepare a new deposit slip that complies with the conditions of the valid cheques; If there are no errors, the Branch shall confirm receipt of the cheque according to the request of the collecting agent or the beneficiary.

m.  In the case where the cheque does not contain the phrase "Pay to Account Only", the Branch may pay in cash upon the beneficiary's request at the presentation locations.

The person receiving cash must clearly write their name, ID number or passport number or military ID, defense worker ID, or other personal identification document with a photo and counterfoil stamp in the designated section for cash collection on the back of the cheque.

n. In the case where the cheque is presented for payment after the issuer has been declared bankrupt or dissolved, the cheque shall be processed in accordance with the provisions of the law.

p. In the case where violations of the cheque control regulations result in misuse or loss of assets, the violator shall be liable for compensation.

q. Checking the payment capability of the cheque (whether there are sufficient funds to cover the payment...).

3. Procedures for Paying Cheques:

3.1 Payment of Transfer Cheques:

Based on the payment instructions on the cheque and the deposit slip, proceed with accurate and secure payment:

 - Record the date of payment, sign on the cheques and deposit slip copies, then process:

+ The cheques serve as debit vouchers for the issuer's current account.

||| The Cheque Ledger is used as a credit voucher for appropriate accounts such as: the beneficiary's current account (in case the beneficiary has an account at the bank); cash (in case the beneficiary withdraws cash); net settlement, State Bank deposit account (in case of net settlement or settlement through the State Bank); the collecting agent's account (in case of settlement under agency agreement)... At the same time, issue appropriate payment vouchers to transfer for net settlement (if the collecting agent participates in net settlement) or issue a money transfer voucher to the collecting agent to credit the beneficiary's account.

||| 3.2. Guaranteed Cheque Payment.

||| a. In the case where the cheque is guaranteed by the issuing branch: The branch shall process the payment according to Clause 3.1 of this Article.

||| b. In the case where the cheque is guaranteed by another branch within the same system:

||| The issuing branch shall prepare an internal information system message to notify the guaranteeing branch requesting confirmation of the cheque guarantee information. The message content must clearly state the cheque details (series, date of issuance, issuer's name, amount guaranteed, currency, guarantee date...).

||| Upon receiving the notification message, the guaranteeing branch shall verify the message and compare the information on the guaranteed cheque, simultaneously preparing a reply message to confirm the cheque guarantee information to the issuing branch.

||| After receiving the reply message from the guaranteeing branch, the issuing branch shall process the cheque payment according to Clause 3.1 of this Article, and based on the Cheque Deposit Ledger, prepare an Internal Electronic Funds Transfer Order to debit the guaranteeing branch (the order content must clearly state the guaranteed cheque number, date of issuance, issuer, beneficiary...), accounting entries:

||| Debit Internal Fund Settlement.

||| Credit Appropriate Account (pending payments or customer deposit accounts).

||| Upon receiving the acceptance notice of the debit order from the guaranteeing branch, the issuing branch shall prepare a transfer voucher for accounting entries:

||| Debit Pending Payments Account.

||| Credit Beneficiary's Cheque Account.

||| At the guaranteeing branch, upon receiving the Internal Electronic Funds Transfer Order debiting the guaranteed cheque payment, it shall make the following accounting entries:

||| Debit Guarantee Account.

||| Credit Internal Fund Settlement Account.

Simultaneously, it shall prepare an acceptance notice of the debit order and send it to the issuing branch.

||| 4. The time taken to prepare and respond to notification messages does not count towards the presentation period of the cheque. However, branches must promptly process notifications to ensure the speed of cheque payment.

||| Article 23. Handling Insufficiently Funded Cheques.

||| In the event that the available balance on the issuer's deposit account at the bank is insufficient to cover the full amount stated on the cheque:

||| 1. For Branches:

||| a. Prepare an Insufficiently Funded Cheque Notification (Form No. 05) and send it to the issuer, the presenter of the cheque (beneficiary or collecting agent) regarding the cheque's inability to be paid immediately upon presentation or the next working day after presentation. This notification can be made by telephone, telegraph, or other suitable means of communication. The branch charges a service fee for this service according to the regulations of the Vietnam Development Bank.

||| b. When receiving a Collection Order requesting partial payment of the cheque amount from the beneficiary, the branch shall process as follows:

||| b1. Verify the legality and validity of the Collection Order. Check the content, signature, stamp on the Collection Order against those on the Cheque Deposit Ledger of the customer to ensure they match.

||| b2. Check the remaining validity period for payment of the cheque.

||| b3. Based on the payment instructions on the Collection Order, proceed with payment to the customer.

- Based on the Collection Order and the current payment capacity of the cheque issuer at the time of receipt of the request, the branch shall record:

Debit the Issuer's Payment Account.

Credit Appropriate Account (Beneficiary's Payment Account; Cash; Net Settlement Account; State Bank Deposit Account, Collecting Agent's Account...).

And prepare a net settlement voucher (if the collecting agent participates in net settlement) or a money transfer voucher to the collecting agent to credit the beneficiary's account, simultaneously:

- Prepare two copies of the Refusal to Pay Confirmation (Form No. 07) for the unpaid amount of the cheque, and write "paid..." (amount paid), "refused..." (amount refused), "date of payment" on the front of the cheque, and hand over the Refusal to Pay Confirmation along with the cheque and other payment vouchers to the beneficiary or collecting agent. Any branch that fails to write the above phrase will be fully responsible for any losses if the cheque is misused.

- b4. No further payments shall be made on cheques that have been partially paid (the issuer and beneficiary must agree among themselves on the payment of the refused amount on the cheque).

c. The branch must maintain a register of partially paid cheques (according to Form No. 13). Information related to the issuer of the insufficiently funded cheque must be processed according to Chapter VIII.

d. When making partial payment of the cheque amount, the branch requires the beneficiary (in case of payment to the beneficiary's account at the branch or cash payment) or the collecting agent (in case of payment through the collecting agent) to prepare a receipt (according to Form No. 09) for documentation.

e. Upon receiving a notification from the issuer regarding the fulfillment of the payment obligation for the full amount on the cheque (the refused amount) accompanied by the cheque, the branch shall store the cheque as follows:

- If the drawer uses the payment service at the Branch to pay off the remaining amount: Retain the Cheque slip together with the payment transaction.

- If the drawer pays in another form: Retain the Cheque slip behind the payment receipt for the previously paid portion.

f. In cases where multiple Cheque slips are submitted simultaneously to claim money from one drawer and the drawer's ability to pay is insufficient to cover all Cheque slips, the order of Cheque payment shall be determined based on the issuance date and the sequence number of the issued Cheques, with the Cheque having the earlier issuance date being paid first; if the Cheques have the same issuance date, then the Cheque with the smaller sequence number will be paid first.

2. For the beneficiary:

Upon receiving the notification from the Branch regarding the Cheque's inability to be honored, the beneficiary has the right to request or through a collecting agent to request the acceptor to proceed with one of the following methods:

- Issue a refusal confirmation for the entire amount recorded on the Cheque and return the Cheque to themselves by signing the confirmation on the Cheque dishonor notice (Form No. 05) received from the Branch and returning it to the Branch.

- Issue a collection order (Form No. 06) requesting the Branch to pay a portion of the amount recorded on the Cheque up to the amount available at the Branch for the drawer and issue a refusal confirmation for the remaining unpaid amount on the Cheque;

Article 24. Suspension of Cheque Payment.

1. The drawer has the right to request the suspension of Cheque payment they have issued accompanied by specific reasons by notifying the Branch in writing to suspend Cheque payment when the Cheque is presented for payment.

2. The effectiveness of the Cheque payment suspension notice depends on the reason for suspension:

a. Reason for loss of Cheque (objective reason causing the loss): Effective immediately upon receipt by the Branch.

b. Other reasons (subjective reasons of the drawer): Effective after the presentation period (30 days from the issuance date).

3. Legal effect of the Cheque payment suspension notice: As stipulated in sub-clause b, Clause 1, Article 27, Chapter VII of this regulation.

4. The drawer is obligated to pay the amount recorded on the Cheque after the Cheque is refused by the Branch according to their Cheque payment suspension notice.

Article 25. Vietnam Development Bank Collecting Cheques.

1. The Branch provides cheque collection services for customers with accounts at the Branch where those Cheques are provided by organizations outside the Branch that offer payment services.

2. The fee for cheque collection services for beneficiaries is implemented according to the regulations of the General Director of the Branch during each period. In cases where the Cheque is dishonored not due to the Branch's fault, the Branch is not obligated to refund the collection fee to the beneficiary.

3. In cases where the Cheque is dishonored due to the Branch's fault, the Branch must bear responsibility for compensating the beneficiary for losses according to the agreement between both parties. In case of disagreement, it shall be handled according to the provisions of the law.

4. Procedures for handing over, receiving, and inspecting Cheques at the Branch are as follows:

a. Based on the Cheques, the beneficiary prepares three copies of the Cheque Deposit Form (Form No. 04). The Cheque Deposit Form is prepared separately for each acceptor along with the Cheques handed over to the Branch. All elements specified on the Cheque Deposit Form must be fully and clearly filled out without alteration or erasure.

b. Upon receiving the copies of the Cheque Deposit Forms along with the submitted Cheques, the Branch must check the elements displayed on the Cheque to ensure:

- The person requesting payment of the Cheque is the legitimate beneficiary of that Cheque according to Clause 8, Article 4 of the Transfer Instruments Law 2005;

- The Cheque is filled out with all required elements as stipulated in Chapter III of this regulation;

- The Cheque is within the presentation period for payment. If the Cheque is presented after the presentation period but not more than six months from the issuance date, the Branch still has the right to collect the Cheque for the beneficiary with the agreement that the Branch will not be responsible if the Cheque is dishonored;

- The continuity of the endorsement signature chain (if any) on the Cheque;

- Matching the Cheque number and amount on the Cheque with the amount listed on the Cheque Deposit Form;

- Summing up the total amount on the Cheque Deposit Form, the amount in figures must match the amount in words;

c. When discovering errors in the Cheque Deposit Form or the Cheques do not meet the above conditions, the Branch must return the Cheques to the depositor and request them to prepare a new Cheque Deposit Form suitable for the Cheques meeting the conditions;

d. If there are no errors, the Branch signs to confirm the receipt of the collection request according to the beneficiary's request, depending on the characteristics of the Cheque and the acceptor's acceptance method or the agreement between the Branch and the acceptor, choose an appropriate handling method:

- For Cheques that meet the immediate payment conditions: Process the credit for the customer and transfer the debt (TTBT...);

- For other Cheques: Record in the Cheque sent tracking book (used as a basis for searching and handling lost or delayed Cheques) and send the Cheques and the Cheque Deposit Form to the presentation location within the agreed time and manner with the beneficiary and in accordance with current regulations of the Branch.

e. Direct handover procedures between the Branch and the acceptor must be recorded in the record of document handover and signed for. If the Branch and the acceptor cannot directly hand over the Cheques to each other, alternative handover methods may be applied but must ensure that the Cheques are promptly, completely, accurately, and safely handed over to the acceptor.

f. Upon receiving the Cheque dishonor notice from the acceptor, the Branch is responsible for sending this notice to the beneficiary and guiding the customer to exercise their rights over the Cheque according to similar provisions of Chapter VI of this regulation.

5. Accounting procedures at the Cheque collector.

a. In cases of full payment of the amount recorded on the Cheque.

Upon receiving the Cheque payment receipt from the acceptor, the Branch uses these documents for accounting purposes:

Debit Suitable Account (Settlement Offset, Deposit Account at State Bank, Deposits of the Drawer...).

Credit Beneficiary's Settlement Deposit Account.

And send the Credit Notice to the beneficiary.

b. In the case where the Cheque is partially paid based on the notification from the drawer.

Based on the amount that has been paid, the Branch uses the partial payment cheque settlement documents sent by the drawer to record:

Debit Suitable Account (Settlement Offset, Settlement Account at State Bank, Drawer's Settlement Account...).

Credit Suitable Account (Other Awaiting Payment Accounts...).

The beneficiary or the Branch (acting as the beneficiary's agent) must prepare Receipt Form (Form No. 09) to hand over to the drawer.

When the Branch receives the beneficiary's Receipt Form submitted, based on the Receipt Form, the Branch proceeds to prepare a transfer voucher, recording:

Debit Other Awaiting Payment Accounts - detailed accounts opened for each beneficiary of the Cheque.

Credit Suitable Account (beneficiary's settlement deposit account; cash).

And send one copy of the Receipt Form to the drawer.

c. In the case where within five working days from the date the Branch sends the Credit Notice regarding partial payment of the amount recorded on the Cheque, the Branch does not receive the beneficiary's Receipt Form, then the Branch must return the partially paid amount of the Cheque to the drawer, recording:

Debit Other Awaiting Payment Accounts - detailed accounts opened for each beneficiary of the Cheque.

Credit Suitable Account (Settlement Offset, Settlement Account at State Bank, Drawer's Deposits...).

Article 26. Cheque Settlement Organization.

1. The General Director of NHPT agrees with other Service Providers on organizing Cheque settlement for customers of both parties.

2. Cheque settlement through the Centralized Payment Clearing Center is carried out as follows:

a. The Cheque settlement through the Centralized Payment Clearing Centers of the State Bank of Vietnam shall be implemented according to the payment clearing process prescribed by the State Bank of Vietnam.

b. For Centralized Payment Clearing Centers which are Service Providers licensed by the State Bank of Vietnam: Cheque settlement between member Service Providers through such centers shall be conducted in accordance with agreements between the center and its members.

Chapter VII

CONTROL AND HANDLING OF LOST OR DAMAGED CHEQUES

Article 27. Lost Cheques.

1. Regarding the Drawer:

a. When the Drawer loses a blank Cheque or upon receiving a lost Cheque notification from the beneficiary, the Drawer must immediately notify the NHPT of the cessation of payment for the lost Cheque and undertake the obligation to issue a new Cheque with the same content as the lost Cheque at the beneficiary's request.

b. The lost/denied Cheque notification has legal effect when sent in writing. Additionally, to minimize risks, the Drawer and the Branch may temporarily accept lost Cheque notifications by telephone, fax, or other means while awaiting the formal written notice.

2. Regarding the Cheque Beneficiary:

a. When the Cheque Beneficiary loses the Cheque, they must immediately notify in writing or by other agreed methods to the Drawer so that the Drawer can issue a cessation of payment notification for the lost Cheque to the Branch. In the notification, the person who lost the Cheque must clearly state the circumstances of the loss and bear responsibility for the truthfulness of the lost Cheque notification.

b. Additionally, to minimize risks, the Beneficiary may notify the Branch of the lost Cheque and request the Branch to provide support pending receipt of the cessation of payment notification from the Drawer.

3. In the case where the person who lost the Cheque is not the Beneficiary, they must immediately notify the Beneficiary to follow the procedures set forth in paragraph 2 of this Article.

After making the lost Cheque notification, the person who lost the Cheque has the right to request the Drawer to reissue a Cheque with the same content as the lost Cheque, with a written commitment to pay on behalf of the Drawer or the Drawer if the lost Cheque is presented by a legitimate Beneficiary for payment.

4. Regarding the Branch:

a. Upon receiving the lost/denied Cheque notification from the Drawer, the Branch must immediately check whether the Cheque has been settled in the Branch system. If the Cheque has not been settled, the Branch is responsible for reporting the Cheque information and notifying the entire system about the lost/denied Cheque.

b. When a lost Cheque is presented for payment, the Branch is responsible for preparing a retention record of the Cheque and notifying the person who issued the lost Cheque notification to resolve the matter.

c. Strictly prohibited are any actions exploiting funds after the Cheque has been notified for cessation of payment. Individuals violating this rule must compensate for all losses suffered by customers and be subject to penalties under the law and regulations of NHPT.

d. If the time the Branch receives the lost/denied Cheque notification is after the Cheque has been settled, the Branch must immediately inform the person issuing the lost/denied Cheque notification and the person who lost the Cheque must bear responsibility for any losses caused by the Cheque loss.

e. NHPT is responsible for retaining information about lost Cheques and notifying the Credit Information Center of the State Bank of Vietnam in writing (Form No. 08).

5. The time the Branch receives the lost/denied Cheque notification is determined as follows:

a. It is the time the Branch receives the lost/denied Cheque notification sent via postal service, based on the Branch's receipt number with the post office. If the document is sent by registered mail, it must clearly state "lost/denied Cheque notification" on the envelope to alert the document department to immediately forward it to the accounting transaction department.

b. It is the time the Branch confirms, if the person who lost the Cheque directly hands over the notification to the accounting transaction department at the Branch's headquarters.

Article 28. Damage to a Cheque.

1. When a cheque is damaged, the beneficiary has the right to request the issuer to issue a new cheque with the same content to replace it.

2. The cheque issuer shall be obliged to reissue the cheque after receiving the damaged cheque if the cheque still contains sufficient information or there is evidence confirming that the holder of the damaged cheque is the legitimate beneficiary of the damaged cheque.

Chapter VIII
VIOLATIONS AND PENALTIES FOR VIOLATIONS

Article 29. Violation of Insufficient Funds for Issuing a Cheque.

1. First Offense.

a. In case the cheque is presented within the payment period, but the amount available at the Branch for issuing the cheque is insufficient to cover the full amount on the cheque, after establishing a refusal to pay certificate in accordance with regulations, the Branch shall have the responsibility to notify the issuer to fulfill the obligation to pay the amount stated on the cheque;

b. After directly paying the beneficiary, the issuer shall notify the NHPT about the fulfillment of the payment obligation, and attach the paid cheque.

c. Within five working days from the date of sending the refusal to pay notice to the issuer, if the Branch does not receive a notification regarding the fulfillment of the payment obligation along with the paid cheque as stipulated in Point b Clause 1 of this Article from the issuer, then the Branch shall immediately and permanently suspend the cheque issuance rights of the violator, and simultaneously notify the Credit Information Center of the State Bank of Vietnam about the violator and the form of handling.

2. Second Offense.

a. If the issuer repeats the violation within less than 12 months from the first offense, and within five working days from the date of receiving the Branch's notification, the issuer pays the beneficiary immediately and notifies the Branch about the fulfillment of the payment obligation along with the paid cheque, then the Branch temporarily suspends cheque clearing for six months, and simultaneously notifies the Credit Information Center of the State Bank of Vietnam about the violator, the form of handling, and notifies the issuer (Form No. 08).

b. If within five working days from the date of sending the refusal to pay notice to the issuer, the Branch does not receive a notification regarding the payment of the issued cheque with insufficient funds along with the paid cheque from the issuer, then the Branch shall immediately and permanently suspend the cheque issuance rights of the violator, and simultaneously notify the Credit Information Center of the State Bank of Vietnam about the violator, the form of handling, and notify the issuer.

3. Third Offense.

If the issuer commits three violations within twelve months, then the Branch shall immediately and permanently suspend the cheque issuance rights of the violator, and simultaneously notify the Credit Information Center of the State Bank of Vietnam about the violator, the form of handling, and notify the issuer.

4. The Branches shall be responsible for checking the information of the person requesting the supply of blank cheques for the first time before deciding to provide blank cheques to that person.

Article 30. Late Payment Interest Rate.

The late payment interest rate for cheques is 200% of the basic interest rate published by the State Bank of Vietnam at the time of application. The amount of late payment penalty is paid to the beneficiary of the cheque.

Chapter IX
IMPLEMENTING PROVISIONS

Article 31. Implementation.

            1. On the basis of this provision, the Directors of Branches shall be responsible for implementing at their units and informing and guiding customers accordingly.Annex No. 01)

            2. During the implementation process, if there are any difficulties, organizations using Cheques and those related to the use of Cheques shall reflect these issues to the Branch of the State Bank serving them for resolution; if the Branches of the State Bank cannot resolve the difficulties, they shall reflect them to the Head Office of the State Bank or the State Bank Branch of the province or centrally governed city where they are located for resolution; if the difficulties still cannot be resolved, they shall reflect them to the State Bank of Vietnam for research and resolution.

Article 32. Any amendments or supplements to this provision shall be examined and decided by the General Director of the State Bank./