Decision No. 30/2006/QD-NHNN dated July 11, 2006 of the State Bank promulgating the Regulation on supply and use of checks

DECISION

PROMULGATING THE REGULATION ON SUPPLY AND USE OF CHECKS

THE STATE BANK GOVERNOR

Pursuant to the 1997 State Bank Law and the 2003 Law Amending and Supplementing a Number of Articles of the State Bank Law;

Pursuant to the 1997 Law on Credit Institutions and the 2004 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the 2005 Law on Negotiable Instruments;

Pursuant to the Government's Decree No. 52/2003/ND-CP of May 19, 2003, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the head of the Settlement Board,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on supply and use of checks.

Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO." Vietnam State Bank's Circular No. 05/2004/TT-NHNN of September 15, 2004, guiding the implementation of a number of contents of Decree No. 159/2003/ND-CP of December 10, 2003, on supply and use of checks, shall hereby cease to be effective.

Article 3.- The director of the Office, the head of the Settlement Board, heads of units of the State Bank, directors of provincial/municipal branches of the State Bank; management board chairmen and general directors (directors) of payment service-providing organizations, and organizations and individuals that use checks and are involved in the use of checks shall have to implement this Decision.

REGULATION

ON SUPPLY AND USE OF CHECKS
(Promulgated together with the State Bank Governor's Decision No. 30/2006/QD-NHNN of July 11, 2006)

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope and subjects of application

1. Governing scope:

This Regulation provides for activities of supply and use of checks and procedures for supply, control, circulation and processing of vouchers and accounting work related to check payment through payment service-providing organizations operating in the territory of Vietnam.

2. Subjects of application:

a/ Organizations supplying checks and participating in check payment and collection include the State Bank of Vietnam (SBV); the State Treasury; commercial banks, development banks, investment banks, policy banks, cooperation banks and banks of other types; people's credit funds; organizations other than credit institutions licensed by the SBV to supply, pay or collect checks.

b/ Organizations and individuals that use checks and are involved in the use of checks include: drawers, transferors, transferees, guarantors, guarantees, beneficiaries, at-law or authorized representatives of aforesaid persons, and other persons involved in the use of checks.

Article 2.- Drawing and payment of checks written with foreign-currency sums

1. Drawing of checks in foreign currencies:

Checks written with sums to be paid in foreign currencies shall be drawn according to the provisions of law on foreign exchange management.

2. Payment of checks in foreign currencies:

a/ Checks for foreign-currency payment defined in Clause 1 of this Article shall be paid with sums written in foreign currencies when their ultimate beneficiaries are allowed to receive foreign currencies according to the provisions of law on foreign exchange management.

b/ For checks written with sums to be paid in foreign currencies, of which ultimate beneficiaries are not allowed to receive foreign currencies according to the provisions of law on foreign exchange management, such sums shall be paid in Vietnam dong at the exchange rates announced by the SBV at the time of payment or at the foreign-currency trading rates announced by banks which carry out the payment at the time of payment (in case banks carry out the payment).

Article 3.- Obligations of drawers

1. To secure their sufficient solvency to pay the whole sums written on checks to beneficiaries at the time such checks are presented for payment within the presentation time limit. The solvency may be either the balance on the payment account which the drawer is entitled to use or the balance on the payment account plus the overdraft limit which the drawer is entitled to use under the agreement with the drawee.

2. Checks shall be drawn in strict compliance with the provisions of Article 10 of this Regulation. In case where a check's beneficiary is refused for payment because such check is made improperly due to the drawer's fault, the beneficiary may request the drawer to make another check for replacement. The drawer is obliged to satisfy that request of the beneficiary right on the day of request or the working day following that day.

3. Where the check payment is rejected for the reason that the check is not fully payable, its drawer shall unconditionally refund the recoursed sum on the check.

Article 4.- Recourse of checks refused for payment

1. In case where a check is refused for payment of the whole or part of the sum written on a check is rejected according to the provisions of this Regulation, the beneficiary may recourse the sum which he/she should have enjoyed lawfully. Subjects, sums of money, modes and procedures of recourse shall comply with the provisions of Articles 48 thru 52 of the Law on Negotiable Instruments.

2. Transferors who have paid sums of money to beneficiaries may recourse such sums from drawers or previous transferors.

Chapter II

SUPPLY OF CHECKS

Article 5.- Blank check forms

Organizations supplying blank checks shall themselves decide on designing forms of blank checks they supply after referring to the blank check form specified in Appendix 1 (not printed herein).

To ensure that checks can be paid via the SBV's Clearing Payment Center or clearing payment centers licensed for operation by the SBV, check-printing paper, size and elements of and positions of elements on blank checks must be designed under the conditions specified in Appendix 1 of this Regulation and in conformity with other specific technical standards of the centers (if any).

Article 6.- Registration of blank check forms

1. Check-supplying organizations shall, before printing blank checks according to new forms, register such blank check forms with the SBV (the Settlement Board). A dossier for registration of a blank check form comprises:

- A written request for blank check form registration, enclosed with the design of the size, color and elements of the blank check;

- A notarized copy of the check-supplying organization's operation license (for first-time registration).

2. The SBV (the Settlement Board) shall have to consider blank check forms and reply to check-supplying organizations within five working days after receiving the latter's blank check form registration dossiers.

Article 7.- Printing of blank checks and notification of blank check forms

1. After their blank check forms are approved by the SBV, check-supplying organizations shall print blank checks. Before supplying blank checks to check users, check-supplying organizations shall have to send printed blank check forms to the SBV (the Settlement Board) for archive.

2. Check-supplying organizations may select printing houses to sign contracts on printing of blank checks, taking self-responsibility for assurance of technical elements and anti-counterfeit elements of blank checks they supply.

3. Check-supplying organizations shall have to notify concerned parties (including payment service-providing organizations which provide services of collecting checks, the Clearing Payment Center and users of payment services) of their blank check forms.

4. Check-supplying organizations shall have to set forth and agree with check users on the following conditions and terms for use of checks they supply:

a/ Supply of a specified quantity of blank checks to customers in suitability with the demand and payment reliability of each subject.

b/ Elaboration of the process and procedures for ensuring safety and defining responsibilities of concerned parties for storage, preservation and circulation of blank checks and checks in the course of settlement within check-supplying organizations;

c/ Definition, guidance and dissemination of the responsibility for preservation of blank checks and the check use requirements for persons supplied with blank checks.

Article 8.- Procedures for supply of blank checks

1. When wishing to use checks, account holders or persons authorized by account holders shall make and send written requests for supply of checks to check-supplying organizations.

2. Upon receiving written requests for supply of checks, check-supplying organizations shall have to examine conditions of check supply requesters.

3. Before delivering checks to customers, blank check-supplying organizations shall have to print or impress words or write the following elements: serial number, name of drawee and name of drawer; and elements on MICR magnetized strip (if any). In case where check-supplying organizations indicate specific places of payment, they must print, impress or write such places of payment on blank check forms.

When deeming it necessary and for check users' convenience, check-supplying organizations may print, impress or write other contents on blank checks.

4. Check-supplying organizations shall open books for monitoring names, addresses and account numbers of persons supplied with checks, the quantity and signs (serial numbers and numbers) of checks supplied to such persons, and request them to sign on the monitoring books.

Article 9.- Responsibilities of persons supplied with blank checks

1. Persons supplied with checks must count the supplied blank checks and examine the accuracy of elements thereof. Any error or omission in supplied checks should be promptly notified to check-supplying organizations for exchange for new checks.

2. After receiving blank checks from check-supplying organizations, if account holders let errors occur or let such checks be abused, they shall be fully responsible for damage.

Chapter III

ELEMENTS OF CHECKS AND CHECK DRAWING

Article 10.- Contents of checks and check drawing

1. A check must be made on the blank check form supplied by a drawee. In case where a check is made on a blank check not supplied by the drawee, the drawee may refuse to settle such check.

2. Elements on checks must be clearly printed or written with fountain or ball-point pens. They must neither be written with pencils nor in red inks, neither be modified nor erased. Checks must be written in Vietnamese. For checks involving foreign elements, foreign languages may be used as agreed upon by the involved parties.

3. The indication of beneficiaries shall be written by one of the three modes defined in Clause 1, Article 60 of the Law on Negotiable Instruments.

4. Sums of money written in figures and in words must be consistent.

Checks' sums of money in figures must be written in Arabic numerals: 0, 1, 2, 3, 4, 5, 6, 7, 8 and 9. A point (.) must be put right following thousands, millions, billions, trillions, million billions and billion billions. Where any numerals are written following units, a decimal point (,) must be put right following such units.

Sums of money in words must be clearly written with the first words' initials being capital letters and closed to the first line. There must be neither double line spacing nor too-large spacing between words. It is forbidden to insert words (on the different line) between two successive words in checks.

5. Name of drawee shall be filled with the name of the payment service-providing organization or the branch of the bank or the payment service-providing organization which shall have to pay the sum of money written on the check to the order of the drawer.

6. Place of payment means place where the check is to be paid and is indicated by the drawer. If no place of payment is indicated in the check, it can be understood that such check shall be presented for payment at the drawee's place of business.

7. Drawing date shall be the date stated by the drawer in the check.

8. The signature of the drawer must be hand-written directly on the check by the drawer using fountain pens or ball-point pens and the same as the specimen signature already registered with the drawee, accompanied with the full name of the signee and the stamp (for checks signed by representatives of organizations).

9. To indicate that the sum on the check shall not be paid in cash but must be paid by account transfer to the beneficiary's account, the drawer or the transferor shall write or affix a stamp inscribed with the phrase "pay into account" on the front side of the check below the word "Check." This phrase shall be valid for any person benefiting from the check.

In case where the check is not written with the phrase "pay into account," the drawee shall pay the check in cash to the beneficiary if the beneficiary so requests.

10. To indicate that the sum on the check shall only be paid to a bank or a beneficiary having an account at a bank being the drawee, the drawer or the transferor shall cross the check with two parallel lines.

11. To indicate that the sum on the check shall only be paid to a designated bank or a beneficiary having an account at such bank, the drawer or the transferor shall cross the check with two parallel lines and write the name of the designated bank between these lines. Checks written with the names of two banks between the two cross lines shall not be valid for payment unless either of the banks named between such two cross lines is the collector.

12. In case where a check drawer is a person authorized by the account holder, the account holder shall have to complete procedures for notification on, registration of, his/her specimen signature and set a limit with the drawee.

Chapter IV

TRANSFER AND COLLECTION OF CHECKS

Article 11.- Transfer of checks

1. For a check signed for transfer, the continuity of the row of transfer signatures shall be expressed as follows: In the first transfer of the check, the person named as the transferor must be the beneficiary whose name has been written on the front side of the check; in the second transfer of the check, the person named as the transferor must be the transferee in the first transfer; and so on until the last transfer.

2. Where the person named as the transferor in any transfer is not the transferee named in the preceding transfer, the row of transfer signatures shall be considered discontinuous.

3. The beneficiary of a check which has been signed for transfer shall be the last transferee with his/her signature in the continuous row of transfer signatures as provided for in Clause 1 of this Article.

The drawee, when paying a check already transferred through transfer signing, shall have to examine the continuity of the row of transfer signatures in order to ensure that the sum written on the check shall be paid to the right beneficiary.

Article 12.- Collection of checks

1. In order to get the sum on a check paid, the check beneficiary may transfer such check for collection by mode of signing for transfer to a payment service-providing organization (the collector), under an agreement between the two parties. The collector may decide on the immediate payment to the signee of transfer for collection or make payment after receiving results of check settlement from the drawee, bearing responsibility for the check's solvency and possibility for recourse of the check's sum in case such check is refused for payment.

2. Where a check cannot be presented directly at the indicated place of payment, the collector may further transfer it to another collector being a payment service-providing organization for which it acts as an agent under an agreement between two parties. Such transferred collector shall present the check.

Chapter V

CHECK PAYMENT SECURITY

Article 13.- Check warrant

1. To be warranted, a check must fully satisfy the following conditions:

a/ Being fully and clearly filled with the elements specified in Article 10 of this Regulation;

b/ Its drawer has sufficient money in his/her account to secure its solvency. In case where its drawer has insufficient money in his/her account, its drawee's consent to overdraft to a certain limit is required to secure the sum on the check be paid;

c/ Its drawer requests a warrant.

2. The drawee may refuse to warrant the check if it fails to satisfy one of the conditions specified in Clause 1 of this Article.

3. Procedures for warranting checks:

a/ In case of using deposit accounts to warrant the check payment:

The check drawer shall make and remit to the drawee an "accreditative expenditure" voucher (the number of originals of accreditative expenditure voucher shall be specified by the drawee but must be sufficient for accounting, settlement and archive) and the check fully filled with required elements, signatures and stamps (if any) on its front side.

The drawee shall control, compare and examine the conditions for a check to be warranted according to the provisions of Clause 1 of this Article. When the conditions are fully satisfied, it shall:

- Write the date (day, month and year), give its signature and affix its stamp and the word "Warrant" on the front side of the check.

- Hand the check for which the warrant procedures have been completed to the customer.

Originals of an accreditative expenditure voucher shall be handled as follows:

- One original shall be used as a voucher for debiting the drawer's payment deposit account and concurrently crediting the drawer's deposit account as security for check payment.

- One original shall be handed as a debit advice to the check drawer.

b/ In case of blockade of money amounts in payment deposit accounts:

Where technical conditions permit, the drawee may blockade the balance of the drawer's payment deposit account under a written agreement. The blockaded amount must be equal to the check payment security amount, with the overdraft limit (if any) taken into account.

4. For a warranted check, the drawee shall only be responsible for securing the payment of the sum written on the check until the expiration of the check presentation time limit.

5. Past the presentation time limit, if a check is still not presented for payment, the drawer may request the drawee to terminate the custody or blockade of the amount used as the security for payment of such check.

Article 14.- Check guaranty

Check guaranty means a commitment made by a third party (hereinafter called the guarantor) with the guarantee to pay the whole or part of the sum written on the check in case the guarantee fails to pay or fully pay the check.

To guarantee a check, the guarantor shall write the word "guaranteed," the guaranty amount, its name, address and signature and the name of the guarantee on the front side of the check or in an enclosed document. Where the name of the guarantee is not stated, the guaranty shall be considered made for the drawer.

The guarantor, after fulfilling the guaranty obligation, may take up the rights of the guarantee to persons related to the check, handle security assets of the guarantee and request the guarantee, the drawer and persons responsible for the guarantee to perform the obligation to pay the guaranty amount it has paid.

Chapter VI

CHECK PRESENTATION AND PAYMENT

Article 15.- Check presentation

A check, whether in the form of paper instrument (in case of settlement by paper instruments) or electronic data (in case of settlement by electronic instruments) shall be regarded as "presented" when it reaches the place of presentation defined in Article 16 of this Regulation.

1. Where a check is presented within 30 days after the drawing date (excluding the time when possible force majeure circumstances or contingencies occur) and the drawer has an adequate solvency for payment of the sum written on the check, the drawee shall have to pay to the beneficiary or the person authorized by the beneficiary right on the day of presentation or on the working day following that day.

2. Where a check is presented beyond the time limit for presentation for payment but within 6 months after the drawing date, the drawee may still make the payment if it receives no "payment stopped" notice regarding such check and the drawer remains solvent.

3. The beneficiary may present the check for payment by way of registered mail via the public postal network. The date of check presentation for payment shall be calculated according to the date indicated in the sending postage.

Article 16.- Place of presentation

The beneficiary or the person authorized by the beneficiary or the collector may present the check at the following places:

1. The place of payment indicated in the check;

2. Where no place of payment is indicated in the check, the check may be presented at the drawee's place of business;

3. Where the check presenter is a payment service-providing organization, apart from the aforesaid places of presentation, such organization may present the check at the Clearing Payment Center of which it is a direct member.

Article 17.- Payment of checks at drawees

1. The receipt and inspection of a check at the drawee shall be conducted as follows:

a/ Upon receiving originals of the list of presented checks together with the check remitted by the beneficiary or the collector, the drawee shall inspect the elements on the check to ensure:

- The payment requester is the lawful beneficiary of such check according to the provisions of Clause 8, Article 4 of the Law on Negotiable Instruments (in case the beneficiary directly presents the check);

- The check is made on the blank check form supplied by the drawee and fully filled with the elements specified in Clause 1, Article 58 of the Law on Negotiable Instruments;

- The check is presented within the time limit for presentation for payment. Where the check is presented beyond the presentation time limit but within six months after the drawing date, the drawee may still make payment if it receives no "payment stopped" notice regarding such check and the drawer has an enough amount of money in his/her account.

- The signature and stamp (if any) of the check drawer or the person authorized to draw the check are the same as the specimen signature and stamp registered with the drawee;

- The check is not drawn beyond the powers defined in the power of attorney for check drawing;

- The continuity of the row of transfer signatures on the check (for transferred checks);

- The consistency between the check number and sum and the sum stated in the list of presented checks;

- The aggregated sum on the list of presented checks in words is consistent with that in figures;

- Other elements according to relevant regulations.

When detecting errors in the list of presented checks or the check lacks one of the aforesaid conditions, the drawee shall return such check to the presenter and request another list of presented checks to be made for checks satisfying the conditions. If no error is detected, the drawee shall sign for certification of the check receipt at the request of the collector or the beneficiary;

b/ Where the check is not written with the phrase "pay into account," the drawee may pay the check in cash to the beneficiary at the latter's request at places of presentation defined in Article 16 of this Regulation.

The cash payee must clearly state his/her full name and number of his/her identity card (or passport, soldier's or defense worker's identity card or other personal identity papers stuck with his/her photo and affixed with certification seal) in the section for cash payment on the check's back side.

c/ For violations of regulations on check control, causing abuse of checks or property loss, violators shall have to pay compensations therefor.

2. For checks which have undergone the inspection under the provisions of Clause 1 of this Article, the drawee shall inspect their solvency and handle them in an accurate and safe manner; use bookkeeping accounts to account payment transactions and keep secret balances on customers' payment accounts in strict compliance with the provisions of law; and handle them in accordance with the process and procedures specified in Clauses 3, 4 and 5 of this Article.

3. If the balance on the check drawer's payment deposit account or the balance plus the overdraft limit on the check drawer's payment deposit account (in case the drawer is allowed to overdraft) is sufficient for payment of the whole sum written on the checks, the drawee shall write the date (day, month and year) of payment and give its signature on the checks and originals of the list, then handle them as follows:

a/ Checks shall be used as vouchers debiting the drawer's payment deposit account or the deposit account to secure the check payment.

b/ Originals of the list of checks shall be used as vouchers crediting such appropriate accounts as the beneficiary's payment deposit account (in case the beneficiary opens an account at the drawee); cash (in case the beneficiary is paid in cash); clearing account or deposit account at the SBV (in case of clearing payment or payment via the SBV); the collector's account (in case of payment under agency agreements), etc., and at the same time, appropriate payment vouchers for clearing (if the collector takes part in clearing payment) or vouchers for transferring money to the collector for crediting the beneficiary's account shall be made.

c/ Procedures for payment and circulation of vouchers in case the drawer and the beneficiary open their accounts at the same bank branch or at two branches of the same payment service-providing organization which has an online payment system shall be specified and guided by the general director (director) of such branch or organization in accordance with the provisions of this Regulation.

4. Handling of checks with insufficient solvency:

a/ Where the money amount which the drawer is entitled to use at the drawee is insufficient to pay the whole sum written on the check, the drawee shall notify the drawer of the insufficient solvency of the check. Such a notification shall clearly state the number of the check, the drawing date, the sum written on the check, deficit amount and the check beneficiary right on the day of presentation or on the working day following that day. The notification may be made by telephone, telegraph or otherwise. The drawee may collect service charge from the drawer.

The drawee shall concurrently notify the check's insufficient solvency to the check presenter (the beneficiary or the collector) right on the day of presentation or on the working day following that day by an information mode agreed upon between them.

b/ The beneficiary may, directly or through the collector, request the drawee to carry out either of the following modes:

- Making a written certification of refusal to pay the whole sum written on the check and returning the check to him/her/it;

- Paying part of the sum written on the check, which is at most equal to the money amount the drawer is entitled to use at the drawee, and compiling a written confirmation of refusal to pay the unpaid part of the check's sum (in this case, the beneficiary shall make a collection order according to a set form, not printed herein).

c/ Upon receiving the beneficiary's collection order requesting the payment of part of the sum written on the check, the drawee shall:

- Examine the legality and validity of the collection order.

- Base itself on the collection order and the drawer's solvency at the time of receipt of the order to:

Debit the check drawer's payment account;

Credit an appropriate account (the beneficiary's account; cash; clearing account; deposit account at the SBV, the collector's account, etc.), and

Make clearing payment vouchers (if the collector takes part in clearing payment) or vouchers for transferring money to the collector for crediting the beneficiary's account, and at the same time:

+ Make a written certification of refusal to pay the check's unpaid sum (according to a set form, not printed herein), writing the phrase "payment of ...(sum of money)..., refusal to pay ...(sum of money)..., date of payment..." on the front side of the check, then hand such written confirmation enclosed with the check and other payment vouchers to the beneficiary or the collector;

+ Make and send to the drawer a notice on refusal to pay the check, clearly stating the number of the check, the drawing date, the name and address of the check beneficiary, the sum written on the check and the sum refused to be paid, requesting the drawer to perform the obligation to pay the check's sum refused to be paid, in conjunction with an announcement of possible consequences in case the drawer fails to fulfill such obligation.

The drawee shall open a book for monitoring partially paid checks. Information on drawers of checks with insufficient solvency must be processed according to the provisions of Article 22 of this Regulation.

- When paying part of the sum written on the check, the drawee shall request the beneficiary (in case of payment into the beneficiary's payment account opened at the drawee or payment in cash) or the collector (in case of payment through the collector) to issue a receipt (according to a set form, not printed herein) for archive.

5. Where many checks are presented at the same time to get paid by the same drawer whose solvency is insufficient to fully pay them, the check payment priority order shall be determined according to their drawing dates and ordinal numbers of the drawn checks. Checks with earlier drawing dates shall be paid first. Among checks of the same drawing date, those with smaller ordinal numbers shall be paid first.

Article 18.- Payment of checks through check collectors

1. The check collector may impose the check collection service charge rate on the beneficiary. In case the check is refused for payment not due to the collector's fault, the collector shall not be obliged to refund the collection service charge to the beneficiary.

2. In case the check is refused for payment due to the collector's fault, the collector shall be obliged to pay damages to the beneficiary under the agreement between the two parties. Where there is no agreement, the case shall be handled according to the provisions of law.

3. Procedures for forwarding, receipt and examination of checks at the collector shall be as follows:

a/ The beneficiary shall draw up a list of presented checks (according to a set form, not printed herein ' originals of the list of presented checks shall be required by the drawee, ensuring that the number of such originals is sufficient for accounting, settlement and archive). The list of presented checks shall be made for each drawee and enclosed with checks to be handed over to the collector. The elements specified in the list of presented checks must be fully and clearly filled without modification or erasure.

b/ Upon receiving originals of the list of presented checks together with the presented checks, the collector shall have to examine the elements shown on the check to ensure:

- The check payment requester is the lawful beneficiary of such check as defined in Clause 8, Article 4 of the Law on Negotiable Instruments;

- The check's compulsory elements specified in Clause 1, Article 58 of the Law on Negotiable Instruments are fully filled.

- The check is presented within the presentation time limit. Where the check is presented after the presentation time limit but still within six months after the drawing date, the collector may still collect for the beneficiary with the agreement that it shall not be responsible in case the check is refused for payment.

- The continuity of the row of transfer signatures (if any) on the check;

- The consistency between the check number and sum and the sum stated in the list of presented checks;

- The aggregated sum on the list of presented checks in words is consistent with that in figures.

c/ When detecting errors in the list of presented checks or the check lacks one of the aforesaid conditions, the collector shall return such check to the presenter and request another list of presented checks to be made for checks satisfying the conditions;

d/ If no error is detected, the collector shall sign for certification of the check collection at the request of the beneficiary, recording it in the book for monitoring sent checks (which shall serve as a source for search and handling of missing or delayed checks), and send checks and the list of checks to the place of presentation within the time limit and by mode agreed upon with the beneficiary and in compliance with the drawee's current regulations.

4. The direct forwarding and receipt of checks between the collector and the drawee must be recorded in the book for monitoring handover and receipt of vouchers with signatures of certification. Where the collector and the drawee do not directly forward and receive checks, they may apply other modes of forwarding and receipt but must ensure that the checks shall be fully forwarded to the drawee in a quick, accurate and safe manner.

5. Procedures for accounting at the check collector

a/ In case the sum written on the check is wholly paid

Upon receiving the check payment vouchers sent by the drawee, the collector shall use such vouchers for accounting:

Debit of an appropriate account (clearing payment account, deposit account at the SBV, deposit account of the drawee, etc.)

Credit of the beneficiary's payment deposit account.

And send a credit advice to the beneficiary.

b/ In case the check is partially paid according to the drawee's notice

Basing itself on the paid amount, the collector shall use vouchers for partial payment of the check sent by the drawee for accounting:

Debit of an appropriate account (clearing payment account, payment account at the SBV, payment account of the drawee, etc.)

Credit of an appropriate account (account of other expected payments, ...),

The beneficiary or the collector (in the capacity as the person authorized by the beneficiary) shall have to issue a receipt (according to a set form, not printed herein) and hand it to the drawee.

When the collector gets the receipt from the beneficiary, it shall base itself on such receipt to make an account transfer bill, accounting:

Debit of the account of other expected payments ' with a detail account opened for each check beneficiary.

Credit of an appropriate account (the beneficiary's payment deposit account; or cash).

And send one original of the receipt to the drawee.

c/ In case where the collector, past five working days after sending the credit advice on the partial payment of the sum written on the check, receives no receipt from the beneficiary, it shall have to refund the check's sum, which has been partially paid, to the drawee, accounting:

Debit of the account of other expected payments ' with a detail account opened for each check beneficiary.

Credit of an appropriate account (clearing payment account, payment account at the SBV, payment account of the drawee, etc.)

Article 19.- Organization of check payment

1. The general director (director) of a payment service-providing organization shall have to stipulate and guide the check payment among its branches and attached units in accordance with the current provisions of law, and concurrently notify and publicize such to their customers for implementation;

2. A payment service-providing organization may agree with another payment service-providing organization in the same province or city or in different provinces or cities on organization of check payment for their customers, provide for professional procedures, powers and responsibilities of the involved parties on the principle that such parties shall bear their own responsibility for assuring security of the check payment, and concurrently notify and publicize such to their customers for implementation.

3. Payment of checks via the Clearing Payment Center shall be conducted as follows:

a/ For the payment of checks via the Clearing Payment Centers of the SBV, the clearing payment procedures specified by the SBV may apply.

b/ The payment of checks via clearing payment centers being payment service-providing organizations licensed by the SBV among member payment service-providing organizations shall be conducted under agreements between such centers and their members.

Chapter VII

CONTROL AND HANDLING OF LOST OR DAMAGED CHECKS

Article 20.- Check loss

1. Cases of check loss shall be handled as follows:

a/ Where a drawer loses a blank check, he/she shall promptly notify the loss in writing or by other modes as agreed upon to the drawee;

b/ Where a check loser is a beneficiary, he/she shall promptly notify the loss in writing or by other modes as agreed upon to the drawee, and at the same time notify such, directly or through previous check transferors, to the drawer, requesting the latter to send a notice on stop of payment regarding the lost check to the drawee.

c/ Where a check loser is not a beneficiary, such loss must be promptly notified to the beneficiary for carrying out of the above procedures.

2. The check loser, after notifying the check loss, may request the drawer to draw another check having the same content as the lost one, and commit in writing to pay on behalf of the drawee or the drawer in case the check already notified lost is presented by the lawful beneficiary for payment.

The drawer is obliged to draw a new check with the same content as the lost one at the request of the beneficiary whose check is lost.

3. The drawee, upon receiving the check loss notification, shall have to promptly verify information on the lost check and record it in the monitoring book.

The drawee must not pay checks already notified lost. Where a check already notified lost is presented for payment, the drawer shall have to make a written record on retention of such check and notify such to the person who has notified the check loss for handling.

4. The drawee shall not bear responsibility for damage caused by the abuse of the lost check if such check is, before its loss is notified, presented and paid according to the provisions of law.

If after the check loss is notified, the drawee still pay such check, it shall have to pay damages to the beneficiary.

5. The drawee is responsible for archiving information on notified lost checks and notify them in writing to the SBV's Credit Information Center.

Article 21.- Damaged checks

1. When a check is damaged, the beneficiary may request the drawer to draw another check with the same content for replacement.

2. The check drawer is obliged to draw another check after receiving back the damaged one, provided that such check still shows sufficient information or there exists evidence that the person holding the damaged check is its lawful beneficiary.

Chapter VIII

VIOLATIONS AND HANDLING THEREOF

Article 22.- Drawing of checks beyond drawers' solvency

1. For first-time violations

a/ In case a check is presented within the payment time limit, but the sum of money which the drawer is entitled to use at the drawee to draw the check is insufficient to pay the whole sum written on the check, the drawee shall, after making a written certification of refusal to pay the check as stipulated, have to notify such in writing to the drawer, requesting the latter to perform the obligation of paying the sum written on the check;

b/ After directly paying the sum of money to the beneficiary, the drawer shall send to the drawee a notice on fulfillment of the payment obligation, and enclose therewith the already paid check.

c/ Within five working days after sending the payment refusal notice to the drawer, if the drawee receives no notice on fulfillment of payment obligation enclosed with the paid check according the provisions of Point b, Clause 1 of this Article from the drawer, the drawee shall have to stop immediately and perpetually the check drawing right of the violator, and concurrently notify the SBV's Credit Information Center of the violator and remedies according to Appendix 6 to this Regulation (not printed herein).

Depending on the severity of their violations, drawers shall be handled according to current provisions of law on sanctioning of administrative violations in the monetary and banking domains.

Drawees shall have to archive information on check drawers with insufficient solvency.

2. For second-time violations:

If the drawer, who relapses into violation within 12 months after his/her first violation, pay the check's sum to the beneficiary and send a notice on fulfillment of payment obligation enclosed with the paid check to the drawee within five working days after receiving the drawee's notice, the drawee shall suspend the check payment for six months and concurrently notify the SBV's Credit Information Center of the violator according to Appendix 6 to this Regulation (not printed herein).

Within five working days after sending the payment refusal notice to the drawer, if the drawee receives no notice on payment of the check drawn beyond the drawer's solvency enclosed with the paid check from the drawer, the drawee shall stop immediately and perpetually the check drawing right of the violator, and apply the remedies mentioned at Point c, Clause 1 of this Article.

3. For third-time violations:

If the drawer commits the violation three times within 12 months, the drawee shall stop immediately and perpetually the check drawing right of the violator and handle the case with the remedies mentioned at Point c, Clause 1 of this Article.

4. Payment service-providing organizations shall have to search for information on first-time blank check supply requesters before deciding to supply blank checks to such persons. The SBV's Credit Information Center shall have to supply the above-said archived information to payment service-providing organizations right on the day of receipt of the latter's request or on the working day following that day.

Article 23.- Fining interest rate

The interest rate of fines for late check payment shall be equal to 200% of the base interest rate announced by the State Bank at the time of application. Fines on late check payment shall be paid to check beneficiaries.

Chapter IX

IMPLEMENTATION PROVISIONS

Article 24.- Implementation guidance

1. General directors (directors) of payment service-providing organizations shall base themselves on the provisions of this Regulation to promulgate professional procedures for supply and use of checks for application within their units in compatibility with the latter's operation characteristics, and concurrently publicize such procedures to customers for implementation, and monitor and inspect the implementation thereof within their units.

2. Problems arising in the course of implementation should be reported by organizations and individuals using checks or involved in the use of checks to payment service-providing organizations which serve them for solution. Payment service-providing organizations which encounter unsolvable problems shall report them to the SBV branches in the same province or centrally-run city for solution. Problems which cannot be solved by SBV branches shall be reported to the SBV for study and solution.