Circular No. 23/2012/TT-NHNN on cash management and cash transactions

CIRCULAR

Regulations on cash management and cash transactions

______________

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 40/2012/NĐ-CP dated May 2, 2012 of the Government on currency issuance operations; storage and transportation of precious assets and securities within the State Bank of Vietnam system, credit institutions, and foreign bank branches;

At the proposal of the Director of the Issuance and Treasury Department;

The State Bank of Vietnam issues this Circular on cash management and cash transactions,

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates cash management regulations within the State Bank of Vietnam system (hereinafter referred to as the State Bank); cash transactions between the State Bank and credit institutions, foreign bank branches, Treasury, organizations, and individuals related to such transactions.

Article 2. Applicability

1. Relevant units within the State Bank of Vietnam system.

2. Credit institutions, foreign bank branches, Treasury, organizations, and individuals related to cash transactions with the State Bank (hereinafter collectively referred to as customers).

Article 3. Currency issuance and cash management operations within the State Bank of Vietnam system

The State Bank implements currency issuance into circulation and withdrawal from circulation through cash receipt and payment activities and other business operations conducted by the State Bank towards customers. The State Bank organizes cash management within the State Bank system through the operations of the Issuance Reserve Fund and the Issuance Business Fund.

Article 4. Cash funds within the State Bank of Vietnam system

1. The State Bank establishes the Issuance Reserve Fund and the Issuance Business Fund to manage issuance reserves and ensure the implementation of currency issuance operations to meet the economy's cash demand, issuance reserve requirements, and replacement needs for non-standard circulating currency and discontinued currency.

2. The Issuance Reserve Fund includes:

- Newly printed and minted currency received from printing and minting facilities;

- Currency received from the Issuance Business Fund including various types of currency withdrawn from circulation, including non-standard circulating currency and discontinued currency.

The Issuance Reserve Fund is managed at Central Treasury and branch treasuries of the State Bank of Vietnam in provinces and centrally-administered cities (hereinafter referred to as State Bank branch).

3. The Issuance Business Fund includes:

- Currency received from the Issuance Reserve Fund;

- Currency withdrawn from circulation, including non-standard circulating currency and discontinued currency.

The Issuance Business Fund is managed at the State Bank Trading Department Treasury and branch treasuries of the State Bank.

Chapter II

 SPECIFIC PROVISIONS

Section 1

 CASH MANAGEMENT REGIME

Article 5. Operations of Issuance Reserve Fund withdrawal and deposit

1. Withdrawal and deposit between Issuance Reserve Funds at Central Treasuries among themselves; between the Issuance Reserve Fund at the Central Treasury and the Issuance Reserve Fund at the State Bank branch and vice versa; between Issuance Reserve Funds at State Bank branches among themselves;

2. Withdrawal and deposit between the Issuance Reserve Fund at the Central Treasury in Hanoi and the Issuance Business Fund at the State Bank Trading Department;

3. Withdrawal and deposit between the Issuance Reserve Fund and the Issuance Business Fund at the State Bank branch;

4. Withdrawal of non-standard circulating currency and discontinued currency from the Issuance Reserve Fund at Central Treasuries for destruction;

5. Deposit of newly issued currency approved for circulation by the Prime Minister into the Issuance Reserve Fund at Central Treasuries and State Bank branches;

6. Deposit of newly printed and minted currency from printing and minting facilities into the Issuance Reserve Fund at Central Treasuries.

Article 6. Authority to Issue Orders for Withdrawal and Deposit from the Issuance Reserve Fund

1. The Director of the Issuance and Treasury Department shall issue orders to transfer cash within the Issuance Reserve Fund system of the State Bank in the cases specified in Clauses 1, 2, 4, 5, and 6 of Article 5.

2. The Director of the State Bank branch shall issue orders to withdraw and deposit cash between the Issuance Reserve Fund and the Issuance Business Fund managed by the State Bank branch in the cases specified in Clause 3 of Article 5.

Article 7. Balancing the Issuance Reserve Fund

Based on the demand for cash receipts and payments; the size and security conditions of the State Bank branch's vaults; and the forecast of the State Bank branch's cash receipt and payment situation, the Director of the Issuance and Treasury Department shall submit to the Governor of the State Bank for approval the plan to transfer cash between the Issuance Reserve Fund at central vaults and the cash transfer entities within the Issuance Reserve Fund system of the State Bank.

Article 8. Activities of Withdrawal and Deposit from the Issuance Business Fund

1. At the State Bank branch, the Issuance Business Fund can withdraw and deposit with the Issuance Reserve Fund and conduct cash transactions with customers who have business and settlement relationships with the State Bank branch.

2. At the State Bank Trading Department, the Issuance Business Fund can withdraw and deposit with the Issuance Reserve Fund at the Central Vault in Hanoi and conduct cash transactions with customers who have business and settlement relationships.

Article 9. Limit of the Issuance Business Fund

Based on the demand for cash receipts and payments, the size, and security conditions of the State Bank branch's vaults, the State Bank Trading Department's vaults, periodically every three months (or at irregular intervals), the Director of the Issuance and Treasury Department shall approve the limit of the Issuance Business Fund balance at the State Bank branch and the State Bank Trading Department.

The State Bank branch and the State Bank Trading Department shall not allow the fund balance to exceed the approved limit. The Issuance Business Fund balance limit only includes types of currency that meet circulation standards.

Section 2

CASH TRANSACTIONS

Article 10. Cash Transactions

1. The State Bank branch and the State Bank Trading Department shall conduct cash transactions with customers through cash receipt and payment activities.

2. In cases where credit organizations have multiple branches in the same area, the State Bank branch shall conduct cash transactions through the main unit selected by the credit organization based on meeting the conditions for safe vaults and other conditions stipulated by the State Bank.

3. The main unit of the credit organization must ensure the ability to meet the cash receipt and payment needs of branches in the area.

Article 11. Provisions on Cash Transactions

1. Credit organizations, foreign bank branches, and National Treasury shall conduct cash transactions with the State Bank branch and the State Bank Trading Department a maximum of twice a day and must notify the transaction time at least two hours in advance. In case of urgent and unexpected needs, the Director of the State Bank branch and the Director of the State Bank Trading Department shall consider and decide based on the request of the credit organization, foreign bank branch, and National Treasury.

2. The Director of the State Bank branch and the Director of the State Bank Trading Department shall provide specific guidance on the time for cash transactions with customers; the end-of-day time to stop transactions to lock the books and inventory the Issuance Business Fund.

Chapter III

RESPONSIBILITIES OF UNITS

Article 12. The Issuance Department and Treasury

1. Shall be responsible to the Governor for the results of cash management operations within the State Bank system; ensure sufficient cash supply for State Bank branches and State Bank Trading Departments.

2. Report monthly to the Governor of the State Bank on the cash situation within the State Bank system.

3. Guide and inspect the implementation of this Circular.

Article 13. State Bank Branches, State Bank Trading Departments

1. Ensure cash demand fulfillment for customers based on deposit account balances at State Bank branches and State Bank Trading Departments.

2. Forecast quarterly cash inflow and outflow situations and submit them to the Issuance Department and Treasury (in accordance with the form issued together with this Circular).

3. State Bank branches shall regularly inspect cash inflow and outflow situations in their jurisdictions to determine the structure of circulating cash types.

Article 14. Credit Organizations, Foreign Bank Branches

1. Adhere to the State Bank's regulations on cash transactions.

2. Carry out statistical reports on treasury activities in accordance with current regulations of the State Bank.

Chapter IV

IMPLEMENTING PROVISIONS

Article 15. Effective Date

1. This Circular takes effect from September 24, 2012.

2. Decision No. 25/2008/QD-NHNN dated September 8, 2008, issued by the Governor of the State Bank regarding the cash management system, reserve issuance fund inflows and outflows, and issuance business fund inflows and outflows within the State Bank system, shall cease to be effective from the date this Circular takes effect.

Article 16. Implementation Organization

The Director of the State Bank Office, the Head of the Issuance Department and Treasury, Heads of relevant units within the State Bank system; Chairmen of the Management Boards, General Directors (Directors) of credit organizations, Directors of foreign bank branches, Directors of National Treasury are responsible for implementing this Circular./.