Decree No. 64/2001/ND-CP On Payment Transactions Through Service Providers

DECREE

Regarding payment activities through service providers

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THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Based on the Law on the State Bank of Vietnam dated December 12, 1997;

This Decision is based on Decree No. 63/1998/ND-CP dated August 17, 1998 of the Government on foreign exchange management and Decree No. 05/2001/ND-CP dated January 17, 2001 of the Government amending and supplementing certain provisions of Decree No. 63/1998/ND-CP dated August 17, 1998 of the Government on foreign exchange management;

At the proposal of the Governor of the State Bank of Vietnam,

DECREE:

Chapter 1:

GENERAL PROVISIONS

Article 1. Object and scope of application

1. This Decree stipulates payment activities through service providers, including:

a) Opening accounts, performing payment services, organizing and participating in payment systems of service providers;

b) Opening accounts, using payment services of payment service users.

2. This Decree applies to domestic and international payment activities through service providers operating within the territory of Vietnam. All payment activities through service providers must comply with the provisions of this Decree and other relevant laws.

Article 2. State management of payment activities

The State Bank of Vietnam performs state management functions in payment activities through service providers:

1. Studying and proposing policies to encourage the expansion and development of cashless payments.

2. Issuing legal regulations on payment within its authority.

3. Granting permits, suspending payment operations for credit organizations and other organizations.

4. Inspecting, auditing, and handling violations of law by payment service providers and users according to its authority.

Article 3. Definitions

In this Decree, the following terms are understood as follows:

Payment activity is the act of opening accounts, performing payment services, organizing and participating in payment systems of service providers, and the act of opening accounts, using payment services of payment service users.

2. Payment service provider is the State Bank of Vietnam (hereinafter referred to as the State Bank), banks, and other organizations permitted to provide payment services.

3. Payment service user is an organization or individual conducting payment transactions through payment service providers.

4. Payment transaction is the act of fulfilling monetary obligations or transferring money between organizations or individuals.

5. Payment service is the provision of payment means, conducting domestic and international payment transactions, collecting and disbursing funds, and other types of services prescribed by the State Bank at the request of payment service users.

6. Other organizations permitted to provide payment services are organizations authorized by competent state agencies to perform one or more payment services.

7. Payment means are cash and non-cash payment instruments used to conduct payment transactions.

8. Payment account is an account opened by payment service users at service providers to conduct payment transactions in accordance with the State Bank's regulations.

9. Account holder is the person named on the account. For individual accounts, the account holder is the individual named on the account. For organizational accounts, the account holder is the legal representative or authorized representative of the organization that opened the account.

10. Joint account holders are two or more persons named on the account..

11. Payment order is an instruction from the account holder to the payment service provider in the form of paper documents, electronic documents, or other forms as prescribed by competent state agencies to request the provider to conduct payment transactions.

12. Overdraft is the act of a payment service user spending more than the amount available in their payment account when using payment services.

Article 4. Application of international treaties and customs in foreign payment activities

1. In international payment activities, if an international treaty to which the Socialist Republic of Vietnam is a party provides different provisions from those in this Decree, the provisions of the treaty shall apply.

2. Parties involved in international payment activities may agree to apply international customs if such customs do not contravene the laws of the Socialist Republic of Vietnam.

Chapter 2:

OPENING AND USING PAYMENT ACCOUNTS

Article 5. Opening payment accounts

1. The State Bank opens payment accounts for domestic credit institutions, other organizations permitted to provide payment services, and foreign banks, financial organizations, and international banks.

The State Bank can open payment accounts at foreign banks, financial organizations, and international banks.

2. Credit institutions that are banks open payment accounts for other credit institutions, other organizations, and individuals. State-owned commercial banks open payment accounts for provincial treasuries in districts and towns that are not provincial capitals.

Credit institutions open payment accounts at the State Bank and other banks. Credit institutions that are banks can open payment accounts at foreign banks when permitted by the State Bank to perform international payment services.

3. Provincial treasuries open payment accounts at the State Bank. In districts and towns that are not provincial capitals, provincial treasuries open payment accounts at a state-owned commercial bank.

4. Other organizations permitted to provide payment services open payment accounts for payment service users in accordance with regulations of competent state agencies.

5. Payment service users have the right to choose banks and other organizations permitted to provide payment services to open payment accounts, except where otherwise provided by law.

Article 6. Using accounts and authorizing others to use accounts

1. Account holders have the right to use the funds in their payment accounts through appropriate payment orders in accordance with the State Bank's regulations and other relevant laws.

2. Account holders are obligated to comply with the provisions of this Decree and other relevant laws when using payment accounts.

3. Account holders may authorize others in writing to use the account in accordance with the law. The authorized person has the rights and obligations of the account holder within the scope of authorization and may not re-authorize a third party.

Article 7. Using and authorizing others to use joint account holders' accounts

In addition to the provisions set forth in Article 6 above, the use of accounts and authorization to use accounts by co-account holders shall also comply with the following regulations:

1. All payment transactions on the account can only be carried out when approved by all co-account holders.

2. Co-account holders may authorize others to use the account within the scope of their rights and obligations. Such authorization must be documented in writing in accordance with the law.

3. In the event that a co-account holder dies, is declared missing, or loses civil capacity, the right to use the account and the obligations arising from such use shall be implemented in accordance with the law.

Article 8. Payment account, conditions, and procedures for opening and using payment accounts

Types of payment accounts, characteristics of payment accounts, conditions, and procedures for opening and using payment accounts shall be stipulated by service providers in accordance with the regulations of the State Bank and other relevant laws.

Article 9. Account freeze

1. A payment account may be partially or fully frozen under the following circumstances:

a) When there is an agreement between the account holder and the service provider;

b) When there is a decision or written request from an authorized person as prescribed by law;

c) Other cases as prescribed by law;

2. The freezing of a payment account shall terminate in the following situations:

a) Upon expiration of the agreed freezing period between the account holder and the service provider;

b) When an authorized person as prescribed by law issues a decision or request to terminate the freezing;

c) As prescribed by law.

Article 10. Closing an account

1. Service providers shall close a payment account in the following circumstances:

a) At the request of the account holder;

b) When an individual account holder dies, goes missing, or loses civil capacity;

c) When an organization holding an account ceases operations in accordance with the law.

2. Service providers have the right to decide to close an account when the account holder violates the law in payment transactions or breaches agreements with the service provider; or when the account has a low balance and has not been active for a specified period as defined by the service provider..

3. After the account is closed, the remaining balance shall be handled as follows:

a) Payment upon request of the account holder or the heir, or the representative of the heir if the account holder is an individual who has died, or the guardian if the account holder is an individual who has lost civil capacity;

b) Payment according to a court's decision;

c) Management in accordance with the regulations of the service provider for cases where the account is closed pursuant to Clause 2 of this Article and the account holder, heir, representative of the heir, or guardian does not claim the remaining balance on the account after the service provider has notified them in writing about the closure of the account.

Chapter 3:

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Article 11. Payment Services

1. Payment services include:

a) Provision of payment instruments;

b) Domestic payment services;

c) International payment services;

d) Collection and disbursement services;

đ) Other payment services as prescribed by the State Bank;

2. Payment services shall be performed in accordance with the following provisions:

a) The State Bank may provide all payment services listed in Clause 1 of this Article to domestic credit institutions, other organizations permitted to provide payment services, and foreign banks, financial institutions, and international banks;

b) Banks may provide the following payment services:

Providing payment services as stipulated at points a, b, and d of Clause 1 of this Article to other credit institutions, organizations, and individuals;

Providing payment services as stipulated at point c of Clause 1 of this Article to other credit institutions, organizations, and individuals if permitted by the State Bank;

Providing other payment services as stipulated at point đ of Clause 1 of this Article in accordance with the regulations of the State Bank;

c) Other organizations permitted by the State Bank to provide one or more payment services listed in Clause 1 of this Article to organizations and individuals must meet the following conditions:

The provision of payment services is necessary and closely related to their main activities;

Meeting material conditions suitable for the requirements of providing payment services;

Having a staff knowledgeable about payment activities.

Article 12. Payment Instruments

Payment instruments include:

a) Cash;

b) Cheques;

c) Demand drafts or payment orders;

d) Collection orders;

đ) Bank cards;

e) Other payment instruments as prescribed by law.

Article 13. Cash Supply

Service providers must promptly and adequately meet the cash deposit and withdrawal requests of payment service users in compliance with the law.

Article 14. Using Payment Services

Payment service users have the right to choose and use payment services provided by service providers in compliance with the law.

Article 15Ensuring Payment Capacity

Payment service users must ensure sufficient funds in their payment accounts to execute payment orders they have issued, except in cases of overdraft agreements with service providers.

Article 16. Executing Payment Orders

Service providers must promptly and fully execute payment orders of payment service users in compliance with the regulations or agreements of the service providers with the users but not contrary to the law.

Article 17. Payment Service Fees

Service providers have the right to charge fees from payment service users.. The level of payment service fees shall be determined and publicly displayed by the service providers.

Article 18. Compensation for Damages

Payment service providers and payment service users shall be responsible for compensating losses if they cause damage to related parties due to violations of regulations or agreements between the payment service provider and the payment service user.

Article 19. Dispute Resolution

In case of disputes between payment service users and payment service providers, the parties involved must first resolve the dispute through mutual agreement. If the dispute cannot be resolved through mutual agreement, the resolution of the dispute shall be carried out in accordance with the provisions of the law.

Article 20Ensuring safety in payments

Payment service providers are required to establish measures to ensure safety in payment activities. Payment service users have the obligation to comply with the safety measures in payment activities established by payment service providers.

Chapter 4:

ORGANIZATION AND PARTICIPATION IN PAYMENT SYSTEMS

Article 21. Internal payment system organization

1. Banks may organize internal payment systems to provide payment services among their affiliated units.

Conditions, procedures, and formalities for joining internal payment systems, as well as measures to ensure the safe operation of internal payment systems, are stipulated by the bank organizing the internal payment system.

2. The establishment of internal payment systems by other organizations providing payment services shall be carried out in accordance with the regulations of competent state agencies.

Article 22. Organization and participation in inter-bank payment systems

1. The State Bank of Vietnam organizes inter-bank payment systems to provide payment services among members including the State Bank of Vietnam, credit institutions, and other organizations authorized to provide payment services.

Conditions, procedures, and formalities for joining inter-bank payment systems, as well as measures to ensure the safe operation of inter-bank payment systems, are stipulated by the State Bank of Vietnam.

2. Banks may organize inter-bank payments according to agreements between the parties in compliance with the regulations of the State Bank of Vietnam.

3. Other organizations authorized to provide payment services may organize and participate in inter-bank payments when permitted by competent state agencies.

Article 23. Participation in international payment activities

1. The State Bank of Vietnam may participate in international payments to implement payment agreements with foreign banks and monetary organizations, international banks in accordance with the law.

2. Banks and other organizations authorized to provide payment services participating in the international payment system must be approved by the State Bank of Vietnam.

Chapter 5:

INFORMATION DISCLOSURE, REPORTING, AND INFORMATION SECURITY REGIME

Article 24. Rights and obligations of payment service providers regarding information and reporting

1. Payment service providers have the right to request payment service users to provide relevant information when using payment services.

2. Payment service providers have the obligation to regularly inform account holders about their payment transactions and account balances.

3. In cases where account holders request, payment service providers may provide additional information about their payment transactions and account balances.

4. Payment service providers, which are banks or other organizations authorized to provide payment services, have the obligation to provide the State Bank of Vietnam with relevant information on payment activities at their organization upon request by the State Bank of Vietnam.

Article 25Information Security

The confidentiality, storage, and provision of information related to deposits of payment service users at payment service providers shall be carried out in accordance with the provisions of the law.

Chapter 6:

VIOLATIONS AND PENALTIES FOR VIOLATIONS

Article 26. Prohibited acts

1. Counterfeiting payment instruments.

2. Possessing, circulating, transferring, or using counterfeit payment instruments.

3. Repairing, erasing, or altering payment instruments or payment documents with the intent to defraud.

4. Intruding or attempting to intrude, damaging, or illegally modifying programs or databases in computer networks used for payment purposes.

5. Providing false information or counterfeiting documents when requesting to use payment services or during the use of payment services.

6. Providing information related to account holders' deposits at payment service providers not in accordance with the provisions of the law.

7. Concealing or conducting payment services for amounts with evidence of illegal sources.

Article 27. Handling Violations

Organizations and individuals violating the provisions of this Decree shall be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the nature and severity of the violation. If damage is caused, compensation for damages shall be made in accordance with the law.

Chapter 7:

IMPLEMENTING PROVISIONS

Article 28. Effectiveness

1. This Decree takes effect from January 1, 2002.

2. Abolish Decree No. 91/CP dated November 25, 1993 of the Government on the organization of non-cash payment.

3. All previous regulations on payments that conflict with the provisions of this Decree are abolished.

Article 29. Responsibility for Implementation

The Governor of the State Bank of Vietnam is responsible for guiding the implementation of this Decree.

The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's committees under the central government shall be responsible for enforcing this Decree.