Quyết định 1346/2001/QD-NHNN

DECISION

ON THE ISSUANCE OF THE REGULATION ON THE PROCEDURES OF COMMERCIAL PAPER COLLECTION THROUGH BANKS

THE GOVERNOR OF THE STATE BANK

Pursuant to the Law on the State Bank of Vietnam and the Law on Credit Institutions No. 01/1997/QH10 dated 12 December 1997;
Pursuant to the Ordinance on Commercial Paper dated 24 December, 1999;
Pursuant to the Decree No. 15/CP dated 02 March, 1993 of the Government on the assignment, authority and responsibility for State management of the Ministries and ministry-level agencies;
Pursuant to the Decree No. 32/2001/ND-CP dated 5 July, 2001 of the Government providing detailed guidance on the implementation of the Ordinance on Commercial Paper;
Upon the proposal of the Director of the Finance and Accounting Department of the State Bank of Vietnam,

DECIDES

Article 1. To issue in conjunction with this decision "the Regulation on the procedures of commercial paper collection through banks".

Article 2. This Decision shall be effective after 15 days from the date of signing.

Article 3. The Director of the Administrative Department, the Director of the Finance & Accounting Department, Heads of units of the State Bank of Vietnam, General Managers of State Bank branches in provinces, cities; General Directors (Directors) of commercial banks, investment banks, policy banks, co-operative banks and types of other bank shall be responsible for the implementation of this Decision.

REGULATION

ON THE PROCEDURES OF COMMERCIAL PAPER COLLECTION THROUGH BANKS
(issued in conjunction with the Decision No. 1346/2001/QD-NHNN dated 29 October, 2001 of the Governor of the State Bank of Vietnam)

I. GENERAL PROVISIONS

Article 1.

The Regulation on the procedures of commercial paper collection through banks shall provide detailed provisions on the sequence of receipt and delivery, control, treatment, payment of commercial paper collected through commercial banks, development banks, investment banks, policy banks, co-operative banks and other types of banks (hereinafter referred to as Banks) which are operating in Vietnam.

The Regulation on the procedures of commercial paper collection through banks shall not apply to following cases:

- Commercial paper which do not arise from commercial activities, the issuance of which do not involve any bank credit activity and which are not payable in Vietnam.

- The drawer, the drawee, the issuer, the transferor, the pledgee, the payee of commercial paper do not open accounts at banks and are not an enterprise provided for in Article 2 of the Ordinance on Commercial Paper.

Article 2. Conditions of commercial paper collection through banks

Commercial paper shall be handed over to banks for collection upon satisfaction of following conditions:

1. Valid commercial paper: Commercial paper which are made and issued in accordance with provisions of the Ordinance on Commercial Paper and Decree No. 32/2001/ND-CP dated 5 July, 2001 of the Government providing detailed guidance on the implementation of the Ordinance on Commercial Paper; Contents of the commercial paper and attachment (if any) must be written fully, clearly, exactly in accordance with applicable provisions and bear the signature, name, address of the drawer of a bill of exchange or the issuer of a promissory note. Issue date (day and month) of a commercial paper must be stated in words, the year of issue must be stated in numbers.

2. The remaining period to maturity of a commercial paper from the date of its handing over to the bank for collection to the end of the payment period stated in the commercial paper shall be at least 15 days. In case where the remaining period to maturity of a commercial paper is less than 15 days, a written approval of the collecting bank is needed.

Article 3. Interpretation

In this Regulation, the following terms shall be construed as follows:

The transferor (collecting customers) shall be the payee of a commercial paper who is at the same time the person handing over commercial paper to banks for collection.

The payer shall be the drawee of a Bill of Exchange, the issuer of a Promissory Note or the person who is responsible for payment of the amount stated in the commercial paper in accordance with provisions of applicable laws.

The payee bank shall be the bank which maintains the deposit account of the payee.

The payer bank shall be the bank which maintains the deposit account of the payer.

The collecting bank shall be the bank which receives a commercial paper from the collecting customer to collect the amount stated in the commercial paper. The collecting bank may be the payee bank or the payer bank.

Payment capability of the payer shall be the balance in the deposit account of the payer at bank.

Article 4. Levels of service fee for commercial paper collection

General Managers (Managers) of banks shall determine levels of service fee for commercial paper collection carried out by their bank in accordance with current provisions on the payment service fees of banks.

II. DETAILED PROVISIONS

Article 5. Procedures of the delivery, receipt of commercial paper between the transferor and banks

1. The transferor must state on a commercial paper the words "transfer for collection", name of the collecting bank, the transfer date for collection, the signature of the transferor when having commercial paper collected by banks. Based on the commercial paper and related payment documents, the transferor shall make an order of the commercial paper collection (in accordance with Appendix No 1), state fully, clearly, exactly the elements, sign, seal with the seal of his company (if any) on all of attachments to the commercial paper which are handed over to the collecting bank for collection.

Mode of delivery, receipt of commercial paper for collection between customers and banks (direct delivery, receipt, sending via post office, number of pages of order of commercial paper collection......) shall be stipulated by the General Manager (Manager) of the collecting bank which need to ensure that commercial paper are delivered, received, controlled, treated in accordance with provisions of applicable laws.

2. Upon receipt of an order of commercial paper collection attached to the commercial paper delivered for collection, the collecting bank must verify to ensure that the conditions of commercial paper to be collected through banks satisfy provisions in Article 2; the elements stated in the order of commercial paper collection are identified exactly with the commercial paper delivered for collection:

a. In case where a commercial paper fails to satisfy conditions for collection, banks shall return it immediately to customers and give clear reasons thereof.

b. In case where a commercial paper satisfies fully conditions for collection but there are errors in the collection order, banks shall request customers to make other collection order for replacement.

c. If there is not any error, banks shall complete procedures to receive the commercial paper and the collection order: writing down the name and account number, putting the signature and their seal on the collection order; writing in the back of the commercial paper with the words "transfer for collection", the date (day, month, year) of collection, and recording them in the book for commercial paper collection and treatment:

- To complete procedures of presentation for acceptance or payment of commercial paper at stipulated payment maturity (if the payer and the payee open accounts at the same bank).

- To send commercial paper together with the order of commercial paper collection to the payer bank for collection (if the collecting bank is the payee bank and the payer and the payee maintain accounts in two different banks). The commercial paper and the order of commercial paper collection shall be sent to the payer bank within 01 working day from the date of receipt of the commercial paper delivered for collection.

Article 6. Procedures of presentation of commercial paper

1. Presentation for acceptance: The bank shall only present the Bill of Exchange for acceptance if the transferor states this requirement in the collection order.

2. Presentation for payment:

a. Banks shall present a commercial paper at the payment place to the payer for his payment of commercial paper at the due date or within 02 working days thereafter.

A commercial paper may be presented by banks for payment later than the payment date stated in the commercial paper in accordance with paragraph 2 Article 34 of the Ordinance on Commercial Paper.

b. A commercial paper which is to be paid "upon presentation" shall be presented by banks for payment on time (the term is stated in the collection order by the transferor).

c. Banks may present a commercial paper for payment via post-office in the form of a registered letter. The period for its presentation in this case shall be based on the seal of the post-office where it is sent.

d. The payer shall pay a commercial paper, which is presented by banks, to the transferor within 02 working days from the date of receipt of the commercial paper. The payment of commercial paper by the payer is represented by the payer making the payment order (payment order, cheque or appropriate payment documents) to request banks to deduct their account for payment of accepted amount of the Bill of Exchange or amount of the Promissory Note.

After 02 working days from the date of receipt of the commercial paper, if the payer fails to make the payment of commercial paper (refusing the payment, not making the payment order or having made the payment order but become insolvent), the payer bank shall have right to return the commercial paper to the payee bank or to the payee in accordance with Article 8 of this Regulation.

dd. If a commercial paper is not presented on time due to objective obstacles and it is not caused by banks mistake such as: the address of the place of presentation or the payer is not found; natural calamities or force de major causes, the payer bank shall return the commercial paper together with a notice stating clearly reasons to the payee bank or the payee. The return of the commercial paper in this case shall be performed within 01 working days from the date of non-presentation of commercial paper.

Article 7. Payment procedures of collection for commercial paper

1. In case where a commercial paper is paid and the payer, the payee have accounts at the same bank:

a. If the payer is able to pay the entire amount that has been accepted for payment which is stated in the commercial paper, following treatment shall be made:

- Based on the payment order (payment instruction, cheque or appropriate payment documents) made by the payer, the account of the payer shall be debited; the commercial paper for collection and attachment (if any) shall be delivered to the payer.

- A copy of the payment order (payment instruction, List of cheques or appropriate payment documents) shall be used as document for crediting the account of the payee.

- A copy of the payment order (payment instruction, List of cheques or appropriate payment documents) together with the order of commercial paper collection which are sealed with the seal of the Bank shall be used as credit advice to the payee.

In the book of commercial paper collection, a corresponding entry shall be recorded.

b. If the payer is not able to pay the entire amount that has been accepted for payment stated in the commercial paper, the bank shall keep in file those commercial paper that have not yet been paid and give, at the same time, notice to the payer and the payee for their information and solution. When they are paid, the date of payment( day, month) shall be written down and documents shall be treated in accordance with provisions in point a paragraph 1 of this Article.

c. In case where a commercial paper is paid partly, the account of the payer shall be deducted on the basis of the payment order made by the payer to pay to the payee for the payable amount and documents shall be treated in accordance with provisions in point a, paragraph 1 of the Article 7 mentioned above. The bank shall keep the commercial paper for collection and attachment (if any) and return it to the payee within 01 working day together with the notice of reasons for the return of commercial paper.

2. In case where commercial paper are paid and the payer, the transferor has accounts at two bank units (of the same or different system).

a. At the payee bank:

The delivery, inspection and treatment the commercial paper for collection shall be performed in accordance with provisions of paragraph 2, Article 5 of this Regulation, after that the payee bank shall sign, put its seal on the order of the commercial paper collection and commercial paper delivered for collection, record in the book of commercial paper collection (which is used for reconciliation and treatment of lost, delayed documents) and send the order of commercial paper collection together with the commercial paper to the payer bank for collection.

Upon the receipt of money transfer document which is sent by the payer bank, the payee bank shall use that document to debit the appropriate account and credit the payee's account; send the credit advice to the payee;

In the book of commercial paper collection, a corresponding entry shall be recorded.

b. At the payer bank

Upon the receipt of the collection order together with commercial paper sent by the payee bank or the payee, the payer bank shall verify the procedure of the collection order, the conditions for the receipt of commercial paper, the identification between collection order and commercial paper, and proceed as follows:

- If the payer is able to pay the entire amount of commercial paper that has been accepted for payment, the payer bank shall, based on the payment order made by the payer, deduct the payers deposit account to transfer to the payee bank and treat documents in accordance with provisions in point a, paragraph 1, Article 7.

- In case where the payer is not able to pay the entire amount of commercial paper that has been accepted for payment, the payer bank shall proceed in accordance with provisions in point b, paragraph 1, Article 7.

- If the commercial paper is paid only partly, the payer bank shall treat in accordance with provisions in point c, paragraph 1, Article 7.

Article 8. The provision for the case where a commercial paper is refused for acceptance, payment or the payer has lost the payment capability

1. When a commercial paper is refused for acceptance, payment or the payer has made the payment order but lost his payment capability, the bank which holds the commercial paper for collection (the payee bank or the payer bank) shall request the payer to give clear reasons in writing for his refusal and proceed to return the commercial paper to the collecting bank or the payee together with the written reason for refusal (in accordance with Appendix No. 2).

2. If a commercial paper is refused but the payer does not give reasons for the refusal in writing, the payer bank shall have the right to return the commercial paper to the collecting bank or the payee, together with a notice stating clearly "the bank has presented the commercial paper on the date of... but it has been refused for acceptance (or payment) and the payer did not give any reason in writing".

3. The return of a commercial paper together with the notice of reasons for return shall be performed within 01 working day from the date where the commercial paper is refused for acceptance, payment or not paid due to the loss of the payers payment capability.

Article 9. Rights and responsibilities of collecting customers and collecting banks

1. For collecting customers

a. The collecting customer shall have the right:

- To request a bank to provide guidance, explanation of the bank's rules on the procedures of commercial paper collection.

- To request a bank to pay a commercial paper in case where a commercial paper is not paid due to the banks failure to present the commercial paper for payment in accordance with provisions in the Article 34 of the Ordinance on Commercial Paper.

b. The collecting customers shall have the responsibility:

- To comply exactly, fully with procedures of commercial paper collection through banks as stipulated by the State Bank, the collecting bank.

- To follow up the payment of commercial paper delivered for collection for timely co-operation with the collecting bank;

- To make timely payment of the collection service fee and other related fees provided for by the collecting bank.

- To receive commercial paper delivered for collection which are returned by the bank due to non-presentation, refusal for acceptance, payment or which are paid partly or when the payer has lost his payment capability.

2. For the collecting bank

a. The collecting bank shall have the right:

- To refuse the receipt for collection of commercial paper, which do not satisfy any of conditions for collection in accordance with Article 2 of this Regulation.

- To return commercial paper to the collecting customer if the commercial paper can not be presented, is refused for acceptance, payment, is paid only partly or when the payer has lost his payment capability. The bank shall not be obliged to bear any responsibility for any delay, or damage caused to related parties which is due to objective reasons and not due to the bank's mistake.

- To be entitled to collect collection service fee and related fees in accordance with the announced fee level in their payment service tariff.

b. The collecting bank shall have the responsibility:

- To complete the procedures of commercial paper collection in accordance with applicable laws.

- To perform accurately, fully requirements stated in the collection order; to guide, explain clearly procedures of commercial paper collection through banks to customers.

- To deliver a commercial paper and attachment (if any) to the payer, after the payer have paid fully the amount of the commercial paper.

- To inform timely to the payee or the payee bank of the non-presentation, refusal for acceptance, payment, or where it is only paid partly or the payer has lost his payment capability.

- To pay to the payee if the bank fails to present the commercial paper for payment in accordance with provisions in the Ordinance on Commercial Paper (Article 34), causing the non-payment of the commercial paper.

III. IMPLEMENTING PROVISIONS

Article 10.

General Managers (Managers) of banks shall be responsible for the implementation of this Regulation.

The Director of the Finance & Accounting Department shall be responsible for the guidance on the implementation of this Regulation.

Article 11.

The amendment, supplement of this Regulation shall be decided upon by the Governor of the State Bank.