Decision No. 22/QD-NH1 Issuing "Rules on Cashless Payment"

Pursuant to …;

Issuing "Rules on Cashless Payment"

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the State Bank of Vietnam Ordinance issued pursuant to Decree No. 37/LCT-HĐNN8 dated May 24, 1990 of the Chairman of the State Council;

Pursuant to Government Decree No. 15/CP dated March 2, 1993 stipulating the tasks, powers, and responsibilities for state management of Ministries and agencies at the ministerial level;

Pursuant to Government Decree No. 91/CP dated November 25, 1993 on the organization of cashless payment;

The status of the Vietnamese dong of foreign bank branches is the difference between total assets on the debit side and total liabilities on the credit side of the Vietnamese dong on the balance sheet, and the business of buying and selling foreign currencies with deferred terms using the Vietnamese dong of foreign bank branches.

Pursuant to …;

Article 1: The "Rules on Cashless Payment" are hereby promulgated along with this Decision.

Article 2: This Decision shall take effect from the date of signature and replace the following documents:

Decision No. 101/NH-QĐ dated July 30, 1991 promulgating the Rules on Payment through Banks;

Decision No. 239/QĐ-NH1 dated November 2, 1992 promulgating the Rules on the issuance and use of Payment Drafts;

Circular No. 06/CV-NH1 dated January 20, 1992 and Decision No. 137-QĐ-NH1 dated July 20, 1993 regarding the acceptance and payment of cash through inter-provincial transfers;

Decision No. 74/QĐ-NH1 dated April 10, 1993 promulgating the Temporary Rules on Electronic Payment Cards;

Decision No. 236/QĐ-NH1 dated December 11, 1993 promulgating the Regulations on the issuance and use of Personal Cheques.

Article 3. The Heads of Departments, Units under the Central State Bank, Branch Governors of the State Bank in provinces and cities, General Directors, Directors of Commercial Banks, Investment and Development Banks, and Heads of the National Treasury Bureau shall be responsible for implementing this Decision. For Credit Cooperatives, the Governor of the State Bank shall issue separate guidance.

RULES

CASHLESS PAYMENT

ISSUED PURSUANT TO DECISION NO. 22/QĐ-NH1 DATED

FEBRUARY 21, 1994 OF THE GOVERNOR OF THE STATE BANK OF VIETNAM

PART I

PAYMENTS BETWEEN CUSTOMERS AND NATIONAL TREASURY BANKS

I. GENERAL PROVISIONS

Article 1. Enterprises, agencies, organizations, associations, armed forces units, Vietnamese citizens, and foreigners operating within the territory of Vietnam (collectively referred to as entities and individuals) have the right to choose a bank to open transaction accounts and conduct payments.

(The term "Bank" in these rules refers to the State Bank, State-owned Commercial Banks, Investment and Development Banks, Joint Stock Commercial Banks, Joint Venture Banks, Foreign Bank Branches in Vietnam, and Credit Cooperatives permitted by the State Bank to provide payment services.)

Budgetary units of the State Bank shall open accounts at the National Treasury.

Entities and individuals holding deposit accounts at banks or the National Treasury (collectively referred to as Account Holders) must comply with the provisions of these Rules when conducting cashless payments.

Article 2. Opening cash transaction accounts at banks or the National Treasury and conducting payments through such accounts shall be recorded in Vietnamese currency. In cases where foreign currency accounts are opened and payments are made in foreign currencies, they must be conducted in accordance with the Government's foreign exchange management regulations.

Article 3. To ensure full and timely payment execution, account holders (the payers) must have sufficient funds in their accounts. Any payment exceeding the balance in the deposit account at the bank or the National Treasury constitutes a violation of the law and will be subject to legal action.

Article 4. Banks and the National Treasury shall be responsible for:

4.1. Executing payment mandates of account holders accurately, safely, and conveniently. Banks and the National Treasury shall fulfill cash payments or transfers within the scope of the deposit balance according to the account holder's request.

4.2. Checking the payment capacity of account holders (the payers) before executing payments and having the right to refuse payment if the account does not have sufficient funds; at the same time, they are not liable for the related contents between both parties.

4.3. If losses occur due to errors during the payment process, the bank and the National Treasury must compensate for the losses and may be subject to legal action depending on the severity of the violation.

Article 5. Banks and the National Treasury shall only provide customer account information to external agencies when authorized by competent authorities as prescribed by law.

Article 6. When providing payment services to customers, banks may charge fees as stipulated by the Governor of the State Bank.

II. SPECIFIC PROVISIONS

Article 7. Entities and individuals conducting payments through banks and the National Treasury shall apply the following formats:

7.1. Cheques: Transfer cheques, demand cheques, fixed amount cheques, personal cheques.

7.2. Mandate payment - transfer.

7.3. Mandate collection.

7.4. Letter of credit.

7.5. Payment draft.

7.6. Payment card.

A. PAYMENT BY CHEQUE

Article 8. A cheque is an order to pay from the cheque issuer to the beneficiary. Within the payment validity period specified in Article 11 of these Rules, the cheque issuer is obligated to pay the beneficiary and must pay immediately upon submission of the cheque to the bank or the National Treasury.

Cheques are applicable to entities and individuals.

Based on the cheque form prescribed by the State Bank of Vietnam, banks and the National Treasury must select and register cheque forms with the State Bank and can only print cheques at the Bank Printing House.

Article 9.

9.1. Banks and the National Treasury must check the list of persons prohibited from issuing cheques as notified by the State Bank and only accept opening payment accounts and selling cheques to customers who are not listed as prohibited from issuing cheques.

9.2. After opening an account and depositing money or maintaining a positive balance, the account holder may obtain cheques from the bank or the National Treasury where the account was opened for use.

The account holder may only issue cheques within the scope of the deposit balance in the account or the balance of the fixed amount cheque book deposited at the bank or the National Treasury.

Article 10. The cheque issuer and beneficiary are responsible for securely managing issued and unissued cheques: in case of loss, they must immediately notify the bank or the National Treasury where the account was opened in writing; if notification is given after the cheque has been paid, they must bear the loss.

Banks and the National Treasury shall not process cheques that have been reported lost by the account holder. If they process cheques that have been reported lost, the bank or the National Treasury must compensate the person who lost the cheque.

Article 11. The validity period for payment of a cheque runs from the date of issuance to the date it is submitted to the Bank or State Treasury. The validity period for payment is separately defined for each type of cheque. The Bank or State Treasury must record the date and month of receipt of the cheque from the customer on each cheque. If a cheque exceeds its validity period for payment, the payee must request the issuer to issue a new cheque to replace the expired cheque. The maximum time limit for replacing an expired cheque is six months from the date of issuance of the expired cheque.

Article 12. When receiving a cheque, the payee must check its validity (all elements prescribed on the cheque must be fully recorded without any alterations or erasures). If any of these elements are missing, the cheque is invalid and has no payment value.

The Bank or State Treasury may refuse payment in the following cases:

a. The cheque exceeds the validity period for payment stipulated in Article 11 of this Regulation and is invalid; return the cheque to the depositor.

b. A counterfeit cheque or one suspected of being counterfeit: prepare a report and retain the cheque and identity documents of the depositor, transfer to the police for handling.

Article 13. Cheques are accounted for according to the principle of debiting before crediting. After verifying that the cheques are valid and have sufficient funds in the deposit account, the Bank or State Treasury must debit the account of the cheque issuer first, then credit the account of the payee.

Article 14. In cases where multiple issued cheques are deposited into the Bank at the same time but the deposit account balance is insufficient to cover all cheques, the Bank or State Treasury will process them in the order of those issued earlier, based on the number and series of the cheques deposited to determine the order of payment.

Article 15. For issued cheques that return to the Bank or State Treasury serving the payer when the account balance or reserved funds are insufficient, they shall be handled as follows:

15.1. The cheque issuer must pay a fine equal to 30% (thirty percent) of the amount of the cheque issued exceeding the balance.

15.2. Pay a late payment penalty (from the date the cheque returns to the Bank serving the issuer until the funds are available for payment) at the highest overdue loan interest rate applicable at the Bank serving the issuer; the late payment penalty is transferred to the payee, while the fine for issuing a cheque exceeding the balance is recorded as a business income of the Bank or State Treasury.

15.3. If the account holder repeatedly issues cheques exceeding the balance up to the second (2) cheque, the Bank or State Treasury discovering this must report to the Central Bank to notify all Banks and State Treasuries. At the branch where the account holder violated, the following measures shall be taken:

a. Suspend the right to issue cheques for a minimum of three months, and only after the account holder commits to not repeating the violation can the right to issue cheques be restored.

b. Reclaim all remaining blank cheques.

c. If the account holder continues to issue cheques exceeding the balance, their right to issue cheques will be suspended.

15.4. If within ten days (counting from the date the Bank or State Treasury discovers the cheque issued exceeding the balance), the cheque issuer has not reimbursed the excess amount or returned the reclaimed blank cheques, or if the violation leads to serious consequences, the cheque issuer will be prosecuted according to the law.

Article 16. Transfer Cheque:

16.1. A transfer cheque (Annex 1) is issued by the Account Holder to directly pay the beneficiary. A transfer cheque is only applicable for payment transactions between customers with accounts at the same branch of the Bank or State Treasury or different branches participating in inter-bank clearing within the province or city.

16.2. The validity period of the cheque is a maximum of ten (10) working days from the date of issuance.

Article 17. Guarantee Cheque:

17.1. A guarantee cheque is issued by the Account Holder and guaranteed for payment by the Bank or State Treasury, prepared according to the format of a transfer cheque or personal cheque. The cheque issuer must ensure that the amount recorded on the cheque is deposited into a separate account so that the Bank or State Treasury can complete the guarantee procedures before delivering the cheque to the customer.

A guarantee cheque is used in cases where the customer requests or according to the decision of the Bank or State Treasury for account holders who violate the issuance of cheques exceeding the deposit account balance as stipulated in Article 15 of this Regulation.

17.2. Scope of application of guarantee cheques.

Customers at the same branch or different branches but within the same banking system;

Customers at different branches, different systems but participating in inter-bank clearing within the province or city.

17.3. The validity period of a guarantee cheque is a maximum of fifteen (15) working days from the date of guarantee.

17.4. The Bank or State Treasury guaranteeing the cheque must complete all guarantee procedures: reserve the required amount for the guarantee cheque in a separate account and ensure the legality and validity of the guarantee cheque transaction.

Upon receiving a guarantee cheque, the Bank or State Treasury serving the beneficiary must verify its accuracy, validity, signature, and guarantee stamp of the Bank or State Treasury serving the issuer; after verification and confirmation of legality and validity, they have the right to immediately credit the beneficiary's account. If errors occur during verification leading to later discovery of invalid cheques, the Bank or State Treasury serving the beneficiary shall bear responsibility.

17.5. If a guarantee cheque is exploited by fraudsters due to:

The Bank or State Treasury improperly guaranteeing the cheque (guaranteeing a void cheque), the Bank or State Treasury must bear responsibility for compensating losses.

Due to exploitation or fraudulent guarantee, the customer must bear the loss or have the obligation to compensate the amount exploited.

All cases of exploiting guarantee cheques mentioned above shall be handled according to the law.

Article 18. Fixed Amount Cheque Book:

18.1. A fixed amount cheque book (Annex 2) with a predetermined amount allowed to be issued for all cheques, applied upon customer request or as specified by the Bank or State Treasury.

A fixed amount cheque book is used for payment transactions between customers and the same branch of the Bank or branches within the same system; or different systems but participating in net settlement within the province or city.

18.2. The minimum amount to open a fixed amount cheque book is twenty million Vietnamese dong.

18.3. To use a fixed amount cheque book, the customer must deposit the required amount into a separate account at the Bank or State Treasury. The deposited funds do not earn interest.

18.4. A fixed amount cheque book has a maximum validity period of thirty (30) working days from the date of opening the fixed amount cheque book. The validity period of each cheque in the fixed amount cheque book depends on the general validity period of the fixed amount cheque book. When issuing a cheque, the issuer must present the fixed amount cheque book for the beneficiary to check the balance; if the balance is sufficient to cover the cheque amount, it will be accepted.

If there are cheques issued exceeding the balance of the fixed amount cheque book due to the customer's deposit, the Bank or State Treasury shall handle them according to the provisions of Article 15 of these Regulations.

18.5. However, cheques issued from a fixed amount cheque book, after being verified as valid, are immediately credited to the beneficiary's account.

Article 19. Personal Cheque.

19.1. Personal cheques (Annex 3) apply to individual customers with personal accounts at the Bank for the payment of goods, services, and other payments.

19.2. Personal cheques can be used for payment transactions between customers with accounts at the same branch of the Bank or branches within the same system or different systems but participating in net settlement within the province or city.

19.3. For personal cheques over five million Vietnamese dong, the issuer must go to the Bank where the account was opened to process the guarantee cheque procedure; for amounts up to five million Vietnamese dong, no such procedure is required.

19.4. The recipient of a personal cheque must request the issuer to present their ID card for verification; only accept cheques personally signed and dated by the person named on the back of the cheque.

19.5. The maximum validity period of a personal cheque is ten working days from the date of issuance.

B. PAYMENT BY AUTHORIZATION TO PAY - TRANSFER

Article 20. Mandate Payment - Transfer Money:

20.1. A mandate payment (Annex 4) is an instruction to pay money from the account holder's account, prepared according to the pre-printed form of the Bank or State Treasury, requesting the Bank or State Treasury serving the payer to deduct funds from the payer's account to pay the beneficiary.

Mandate payments are used to settle payments for goods, services, or transfers within the same banking system or State Treasury or across different systems.

20.2. Within one working day, the paying Bank or State Treasury must complete the payment order or reject it if the customer's account does not have sufficient funds, or if the payment order is not properly filled out. Upon receiving valid documentation, the Bank or State Treasury serving the beneficiary must immediately credit the account and notify the customer.

20.3. A hand-carried transfer cheque (Annex 5) is a type of transfer used upon customer request. Hand-carried transfer cheques are applied within the same banking system or State Treasury, issued by the Bank or State Treasury after depositing funds into a designated account.

20.4. The maximum validity period of a hand-carried transfer cheque is thirty days from the date of issuance noted on the cheque.

20.5. Inter-provincial or inter-city cash transfers through Banks apply to units and individuals with such requirements.

Banks will execute by transferring funds quickly via electronic means to the recipient's address or issue hand-carried transfer cheques to customers.

C. PAYMENT BY COLLECTION ORDER

Article 21. Mandate Collection:

21.1. A mandate collection (Annex 6) is used for payment transactions between customers with accounts in the same branch of the Bank or branches within the same system or different systems. The mandate collection is established by the beneficiary and sent to the Bank or State Treasury serving the beneficiary to collect payment for delivered goods or provided services. Both the buyer and seller must agree to use the mandate collection method with specific payment conditions recorded in the economic contract and must notify the Bank or State Treasury serving the beneficiary in writing to serve as the basis for executing the mandate collections.

21.2. After delivering goods or completing service provision, the beneficiary establishes a mandate collection document according to the Bank or State Treasury's model, accompanied by invoices or waybills, and sends it to the Bank or State Treasury serving the beneficiary or directly to the Bank or State Treasury serving the payer to request collection.

To expedite the collection of payment for goods or services according to the mandate collection document, the beneficiary may clearly state on the document that the Bank or State Treasury serving the payer should transfer funds electronically, with the beneficiary bearing the fee.

21.3. Upon receipt of the mandate collection document, within one working day, the Bank or State Treasury serving the payer must deduct funds from the payer's account and credit them to the beneficiary's account to complete the payment. If the payer's account does not have sufficient funds to make the payment, the payer will be penalized for late payment as stipulated in Article 15.2 of these Regulations.

D. PAYMENT BY LETTER OF CREDIT

Article 22. Letter of Credit:

22.1. A letter of credit (Annex 7) is used for payment of goods under conditions where the seller requires immediate payment and the total value matches the goods delivered according to the contract or purchase order.

22.2. When needed, the buyer prepares a letter of credit application requesting the Bank serving the buyer to deduct a sum equal to the total value of the purchased goods from the buyer's deposit account (or deposit into the Bank) and hold it in a separate account. The paying Bank must immediately send the letter of credit to the Bank serving the beneficiary to inform the customer. The minimum amount for a letter of credit is ten (10) million Vietnamese dong. Funds deposited for a letter of credit do not earn interest.

Each letter of credit is only used to pay one beneficiary.

22.3. The payment validity period of a letter of credit is three months from the date the Bank serving the buyer receives the letter of credit application.

22.4. The seller is responsible for delivering goods to the buyer after receiving notification that the letter of credit has been issued.

The serving bank pays the proceeds to the beneficiary based on the invoice, bill of lading, or other delivery documents bearing the signature of the representative of the payer, accompanied by a power of attorney from the payer presented by the beneficiary in accordance with the unified terms stipulated between the buyer and seller as recorded on the letter of credit. After paying the proceeds to the beneficiary, the beneficiary's bank must immediately notify the serving bank of the payer to settle the letter of credit.

Any disputes regarding delivered goods and paid amounts shall be resolved by the buyer and seller.

E. PAYMENT BY PAYMENT ORDER

Article 23. Payment order:

23.1. Payment orders issued by the State Bank have the face value and payment term printed on each sheet, without naming the holder, and are negotiable.

The specific face value is determined by the Governor of the State Bank during each period.

23.2. Payment orders are applicable for customers to pay for goods, services, repay bank loans, deposit into the state budget, transfer to a bank account, or save money.

23.3. To use payment orders, customers may:

Deposit cash into the bank;

Withdraw funds from their current account at the bank;

Borrow from the bank an amount corresponding to the value of the required payment order.

23.4. When customers no longer use payment orders or when they expire, the users must return them to the bank or National Treasury to credit their deposit accounts or exchange them for cash or valid payment orders.

Upon receiving payment orders, banks and treasuries must verify them; if found valid and lawful, they will credit the deposit account, exchange for cash, or valid payment orders according to the customer's request.

23.5. A payment order that has expired its circulation period or been altered, soiled, torn... is not effective for payment.

The holder of a payment order must take responsibility for preserving it like cash. Losing a payment order is equivalent to losing cash.

G. PAYMENT CARD

Article 24. Payment card.

24.1. Payment cards are issued and sold by banks for customers to use to pay for goods, services, other payments, and withdraw cash from agency banks or automatic cash dispensers.

24.2. There are various types of payment cards, currently applying three types:

a. Debit card: applicable for customers with regular credit and payment relationships with the bank, issued upon approval by the bank's management.

Each card specifies the maximum payment limit set by the issuing bank, and the customer can only make payments within this limit.

b. Prepaid payment card: widely available for all customers who wish to use it, requiring the customer to deposit funds into a separate account at the bank, allowing the use of a card with a payment value equal to the prepaid amount.

c. Credit card: applicable for customers meeting the conditions approved by the bank for borrowing. The customer can only make payments within the credit limit approved in writing by the bank.

24.3. The issuing bank is responsible for processing payments made by cardholders to beneficiaries through agency banks designated by the issuing bank.

The recipient of card payments is a business providing goods or services to cardholders.

Agency banks are branches designated by the issuing bank. They are responsible for paying the recipient upon receipt of a valid payment slip; cardholders can withdraw cash from agency banks or ATMs, with a limit of 5 million dong per withdrawal and once per day.

24.4. If a card is lost, the cardholder must immediately inform the issuing bank in writing; the issuing bank must then notify the agency banks in writing to inform the recipients of card payments.

24.5. When the credit limit, prepaid balance, or validity period of the card expires, the cardholder must visit the issuing bank to renew the usage.

24.6. Recipients of card payments and cardholders must pay fees to the issuing bank.

24.7. The issuing bank is responsible for promptly transferring the amount indicated on the payment slips received from agency banks to the recipients after the agency banks have processed the payments according to the issuing bank's regulations; refunding unused prepaid balances to the cardholder.

24.8. Cardholders must properly store their cards, use them according to regulations, and not allow others to use them.

24.9. Recipients of card payments must accept only those cards that have been verified with the correct PIN and meet the security requirements of the issuing bank; they will not accept cards marked as lost or banned. Within ten working days from the date of issuance of the supply invoice, the recipient of card payments must submit the payment slip to the agency bank for settlement. Beyond this period, the bank will not process the payment; the recipient must contact the cardholder to issue a new invoice for settlement.

24.10. Within one working day from receiving a valid payment slip (complying with the issuing bank's regulations), the agency bank must pay the recipient the amount indicated on the slip.

24.11. Any entity failing to comply with the issuing bank's regulations or accepting cards that have been banned will bear the loss.

PART TWO

PAYMENTS BETWEEN BANKS AND NATIONAL TREASURY

Article 25. Payment between banks and the State Treasury shall be carried out through the following forms:

25.1. Single payment through the deposit account opened by the bank or the State Treasury at the State Bank.

25.2. Net settlement among banks and the State Treasury within the province or city under the chairmanship of the provincial or municipal State Bank.

25.3. Direct net settlement among two or more banks on a district or town territory without a branch of the State Bank.

25.4. Collection and payment agency services among banks according to the mandate agency agreement.

Opening a deposit account with another bank for transaction purposes.

Mandated collection and payment agency services among settlement banks according to the mandate agency contract; periodic collections and payments.

PART THREE

IMPLEMENTING PROVISIONS

Article 26. Banks and the State Treasury Department shall base this Code and the Circular guiding it issued by the State Bank to provide specific guidance on cashless payment services for customers.

The State Bank shall be responsible for directing and inspecting the implementation of the cashless payment code in the economy.

Article 27. Any amendment or supplementation to this payment code falls within the authority of the Governor of the State Bank./.