Circular 22/2015/TT-NHNN prescribing the supply and use of cheques

CIRCULAR

Prescribing the supply and use of cheques

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

Pursuant to the Law No. 47/2010/QH12 dated June 16, 2010 on Credit Institutions;

Pursuant to the 2005 Law on Negotiable Instruments;

Pursuant to the Government’s Decree No. 156/2013/ND-CP dated November 11, 2013, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to the Government’s Decree No. 101/2012/ND-CP dated November 22, 2012, on non-cash payments;

At the proposal of the Director of the Payment Department;

The Governor of the State Bank of Vietnam hereby promulgates the Circular prescribing the supply and use of cheques.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular prescribes the supply and use of cheques at banks and foreign bank branches operating within the territory of Vietnam.

Article 2. Subjects of application

1. The State Bank of Vietnam, commercial banks, banks for social policies, cooperative banks, foreign bank branches (hereinafter referred to as banks), people’s credit funds, microfinance institutions, and other organizations as prescribed by the State Bank of Vietnam (hereinafter referred to as the State Bank).

2. Organizations and individuals that use cheques and are related to the use and honouring of cheques, including: the drawer, the drawee, the endorser, the endorsee, the guarantor, the guaranteed party, the payee, the legal representatives thereof, and other persons related to the use of cheques.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Cheque means a negotiable instrument made by a drawer to order the drawee to pay a certain monetary amount from the drawer’s payment account to the payee.

2. Drawer means a person who draws and signs a cheque.

3. Drawee means a bank where the drawer opens a payment account, and which is responsible for paying the amount of money inscribed in a cheque under the drawer’s order.

4. Payee means one of the following persons:

a) The person who receives the amount of money inscribed in the cheque as designated by the drawer;

b) The endorsee of a cheque under the forms of endorsement prescribed in this Circular;

c) The bearer of a cheque in which the payment is made to the person bearing it.

5. Related person means any person who participates in a payment-by-cheque relationship by signing the cheque as a drawer, endorser, guarantor, or certifier.

6. Collecting banker means a bank, people’s credit fund, microfinance institution, or other organization as prescribed by the State Bank that provides the service of collecting payment for a cheque on behalf of the payee.

7. Guarantor means a person who undertakes to pay, in whole or in part, the amount of money inscribed in a cheque to the payee when the guaranteed party fails to pay or pays insufficiently upon presentment.

8. Guaranteed party means the party for which the guarantor undertakes to fulfil the payment obligation to the payee.

9. Cheque certification means an act by which the drawee guarantees payment for a cheque when it is presented for payment within the time of presentment.

10. Cheque issuance means the drawer signing and delivering the cheque to the payee for the first time.

11. Cheque endorsement means the payee transferring the ownership of a cheque to the endorsee by endorsing on the back of the cheque and delivering it to the endorsee.

12. Check clearing house means the State Bank, or another organization licensed by the State Bank to organize and assume the prime responsibility for the exchange, cheque clearing, and settlement of financial obligations arising from cheque clearing to its members which are banks and payment service providers licensed by the State Bank.

13. Cheque supplier means the drawee.

14. MICR (Magnetic Ink Character Recognition) means a character recognition system that uses special ink and characters.

Article 4. Drawing and honouring of cheques inscribed with foreign-currency amounts

1. Drawing cheques inscribed with foreign-currency amounts:

A cheque may be drawn for an amount of money payable in a foreign currency in accordance with law regulations on foreign exchange management.

2. Honouring of cheques inscribed with foreign-currency amounts:

a) A cheque inscribed with a foreign-currency amount as prescribed in Clause 1 of this Article shall be honoured with the amount of money inscribed in the cheque in such foreign currency if the final payee is permitted to receive foreign currency in accordance with law regulations on foreign exchange management;

b) If a cheque is inscribed with a foreign-currency amount but the final payee is not permitted to receive foreign currency in accordance with law regulations on foreign exchange management, the amount of money inscribed in the cheque shall be paid in Vietnamese Dong at the exchange rate announced by the State Bank at the time of payment or at the foreign exchange trading rate announced by the paying bank at the time of payment.

Article 5. Cheque recourse due to dishonour

1. In case a cheque is dishonoured, in whole or in part, as prescribed in this Circular, the payee has the right to recourse the amount of money to which such payee is legally entitled. The subject matter, amount of money, method, and procedures for recourse shall be applied in accordance with Articles 48 through 52 of the Law on Negotiable Instruments.

2. A endorser who has paid the payee has the right of recourse against the drawer or a prior endorser.

Chapter II

ELEMENTS OF CHEQUES AND CHEQUE DRAWING

Article 6. Elements of a cheque

The elements of a cheque shall comply with Article 58 of the Law on Negotiable Instruments.

Article 7. Making and drawing cheques

1. A cheque must be made on a blank cheque form supplied by the drawee; if a cheque is made on a blank cheque form not supplied by the drawee, the drawee has the right to dishonour such cheque.

2. The elements on a cheque must be printed or inscribed clearly with an ink pen or ballpoint pen, not with a pencil or with red ink or erasable ink; no corrections or erasures are permitted. The language on the cheque shall be Vietnamese. In case a cheque involves foreign elements, a foreign language may be used as agreed upon by the parties.

3. The designation of the payee shall be inscribed in one of the three ways prescribed in Clause 1, Article 60 of the Law on Negotiable Instruments.

4. The amount in figures on the cheque must be equal to the amount in words.

The amount in figures inscribed on a cheque must be written using Arabic numerals: 0, 1, 2, 3, 4, 5, 6, 7, 8, 9. A period (.) must be placed as a separator after the digits for thousands, millions, billions, trillions, and quadrillions. If there are digits after the unit value, a comma (,) must be placed after the unit digit.

The amount in words must be inscribed clearly: the first letter must be capitalized and start at the beginning of the first line, with no extra line spacing or gaps between words, and no other words may be inserted (in different lines) between two consecutive words.

5. The place of payment is the place where the cheque is to be honoured and is designated by the drawee. If no place of payment is indicated on the cheque, it shall be honoured at any business location of the drawee.

6. The drawing date is the date the drawer inscribes on the cheque, and it must be inscribed in figures.

7. The drawer’s signature must be handwritten directly on the cheque by the person having rights and obligations with respect to the cheque or by a person authorized to make and draw the cheque. The drawer’s signature must be made with an ink pen or ballpoint pen, matching the specimen signature registered with the drawee, accompanied by the full name and seal (if any) of the organization if the cheque is signed by the organization’s legal representative, or an electronic signature (in case of electronic payment processing).

8. To indicate that the amount of money on a cheque is not to be paid in cash but must be paid by transfer to the payee’s payment account, the drawer or an endorser shall inscribe or stamp the phrase “trả vào tài khoản” (pay to account) on the front of the cheque, immediately below the word “Séc” (Cheque).

9. To indicate that the amount of money on a cheque may only be paid to a bank or to a payee holding a payment account with the drawee, the drawer or an endorser shall draw two parallel diagonal lines on the front of the cheque, from the upper left corner to the lower right corner.

10. To indicate that the amount of money inscribed in a cheque may only be paid to a specific bank or to a payee holding a payment account at that bank, the drawer or a endorser of the cheque shall draw two parallel diagonal lines on the front of the cheque from the upper left corner to the lower right corner and inscribe the name of the designated bank between the two lines. A cheque bearing the names of two banks between the parallel lines is not valid for payment, unless one of the two named banks is the collecting banker for such cheque.

11. In case the drawer of a cheque is a person authorized by the payment account holder, the account holder must complete all procedures for notification, registration of the specimen signature, and defining the limit (if any) with the drawee.

Article 8. Rights and obligations of the drawer

1. The drawer has the right to request a stop payment on a cheque they have drawn by notifying the drawee in writing to stop payment when the cheque is presented for payment. A stop payment notification shall take effect only after the time of presentment for payment as prescribed in Clause 1, Article 19 of this Circular has expired, and the payee or the payee’s authorized person has not yet presented the cheque for payment at the drawee.

2. To draw cheques in accordance with Article 7 of this Circular.

3. To ensure sufficient solvency to pay the whole amount of money inscribed in a cheque to the payee at the time the cheque is presented for payment within the time of presentment. Solvency consists of the balance in the payment account plus any overdraft facility that the drawer is permitted to use under an agreement with the drawee.

4. In case a cheque is dishonoured due to being improperly drawn, if the payee so requests, the drawer is obliged to draw a replacement cheque on the same day of the request or on the working day following the request.

5. In case a cheque is dishonoured, in whole or in part, because the drawer has insufficient solvency for the amount of money on the cheque, the drawer must unconditionally refund the amount of money subject to recourse on the cheque.

Chapter III

SUPPLY OF CHEQUES

Article 9. Blank cheque forms

1. Cheque suppliers shall decide on the design of the blank cheque forms they supply in accordance with Article 58 and Article 59 of the Law on Negotiable Instruments.

2. To ensure a cheque can be honoured via a cheque clearing house, the cheque paper, dimensions, and the elements and their positions on the blank cheque must be designed in accordance with Appendix 01a and Appendix 01b to this Circular.

Article 10. Procedures for registration of blank cheque forms

1. Before printing blank cheques for supply to customers, commercial banks, banks for social policies, cooperative banks, and foreign bank branches must register the blank cheque form with the State Bank. The cheque supplier shall submit, either in person or by post, to the State Bank (the Payment Department) 01 dossier of blank cheque form registration, which shall comprise:

a) A written request for registration of the blank cheque form, made using the form in Appendix 08 to this Circular;

b) The design of the blank cheque, including its dimensions, colour, and detailed elements;

c) A copy from the master register or a certified true copy, or an uncertified copy presented with the original for comparison, of the cheque supplier’s operating license (for the initial registration), or an uncertified copy for subsequent registrations.

2. Within a period of 5 working days from the date of receiving a complete and valid dossier, the State Bank shall issue a written confirmation of the registration of the cheque supplier’s blank cheque form.

Article 11. Printing of blank cheques and notification of blank cheque forms

1. After the blank cheque form is confirmed in writing by the State Bank, the cheque supplier shall proceed with printing of blank cheques. Before supplying blank cheques to users, the cheque supplier must send a printed sample of the blank cheque form to be archived at the State Bank (the Payment Department).

2. The cheque supplier may select a printing facility and execute a contract for printing blank cheques, on the basis of being solely responsible for ensuring the technical and anti-counterfeiting elements of the blank cheques it supplies.

3. The cheque supplier is responsible for notifying concerned parties of its blank cheque form.

4. The cheque supplier is responsible for prescribing and agreeing with cheque users on the conditions and terms of use for the cheques it supplies:

a) Supplying a quantity of blank cheques to customers, on the basis of ensuring it is appropriate to the needs and payment reliability of each specific customer;

b) Developing procedures to ensure safety and delineate the responsibilities of relevant parties in the storage, preservation, and circulation of blank cheques and cheques during the payment processing within the cheque supplier’s internal system;

c) Prescribing, guiding, and disseminating information on the responsibility for safeguarding blank cheques and the requirements for their use to the persons supplied with blank cheques.

5. The cheque supplier is responsible for checking the information of a person requesting to be supplied with blank cheques for the first time at the National Credit Information Centre of Vietnam before deciding to supply blank cheques to such person.

6. The cheque supplier shall provide full and timely debit and credit notices to customers who open payment accounts with it, in accordance with the method and credit or debit timing agreed upon between the cheque supplier and the customer, provided that such an agreement is consistent with the law regulations.

7. The cheque supplier must guide customers on using the cheque payment service provided by it; and promptly answer or handle inquiries and complaints from organizations and individuals using the service within the scope of its obligations and powers.

8. The cheque supplier must implement customer identification measures; and control, detect, and report large-value transactions, electronic money transfers, and suspicious transactions to competent state authorities in accordance with law regulations on anti-money laundering and other relevant law regulations.

Article 12. Procedures for supplying blank cheques

1. When in need of using a cheque, the payment account holder or a person authorized by the account holder shall prepare a written request for the supply of blank cheques and submit it to the cheque supplier.

2. Upon receiving the written request for blank cheques, the cheque supplier is responsible for checking the conditions of the requester.

3. Before supplying blank cheques to a customer, the cheque supplier is responsible for printing, stamping, or pre-filling the following elements: cheque number, name of the drawee, name of the drawer; and the elements on the MICR line (if any). In case the cheque supplier specifies a place of payment, it must be printed, stamped, or pre-filled on the blank cheque form.

4. The cheque supplier must keep records of the name, address, and payment account number of the person supplied with blank cheques, as well as the quantity and serial numbers of the cheques supplied to such person.

Article 13. Responsibilities of the person supplied with blank cheques

1. The person supplied with blank cheques must check the quantity of cheques and the accuracy of the elements on the supplied blank cheques. If any errors are found, such person must immediately notify the cheque supplier for a replacement.

2. After receiving blank cheques from the cheque supplier, if any errors occur or the cheques are misused, the person supplied with the cheques shall be fully responsible for any resulting damages.

Chapter IV

CHEQUE ENDORSEMENT AND COLLECTION

Article 14. Cheque endorsement

1. For a cheque endorsed over, the continuity of the chain of endorsement signatures must be as follows: in the first endorsement of the cheque, the endorser must be the payee named on the front of the cheque; in the second endorsement of the cheque, the endorser must be the endorsee from the first endorsement thereof; and so on for all subsequent endorsements.

2. The payee of a cheque endorsed over is the last endorsee in the continuous chain of endorsement signatures as prescribed in Clause 1 of this Article.

3. The drawee, when honouring a cheque that has been endorsed over, is responsible for checking the continuity of the chain of endorsement signatures to ensure that the amount of money on the cheque is paid to the correct payee.

Article 15. Cheque collection

1. To be paid the amount of money inscribed in a cheque, the payee may endorse the cheque for collection to a collecting banker under a written agreement between the two parties. The collecting banker may decide to pay the endorser immediately or after receiving payment confirmation from the drawee, on the basis of being solely responsible for the cheque’s payability and the ability to exercise recourse for the amount of money inscribed in the cheque in case it is dishonoured.

2. In case it is not possible to present the cheque directly at the designated place of payment, the collecting banker has the right to endorse the cheque to another collecting banker with whom it has an agency relationship, under an agreement between the two parties, for such collecting banker to present the cheque.

Chapter V

CHEQUE PAYMENT SECURITY

Article 16. Cheque certification

1. Conditions for cheque certification

To have a cheque certified, a drawer may request the drawee to certify the cheque, provided that the drawer either has sufficient funds in the payment account to cover the cheque, or, if the funds in the payment account are insufficient, has been granted by the drawee an overdraft facility up to a limit sufficient to cover the amount stated on the cheque.

2. Cheque certification procedures

a) Certification of a cheque using deposited funds

The drawer shall prepare and submit to the drawee the cheque with all elements fully filled, signed, and sealed (if any) on its front, along with a payment order (the amount of which shall be specified by the drawee but must be sufficient for payment processing and record-keeping). The drawee shall check and verify that the conditions in Clause 1 of this Article are met, then sign, affix the drawee’s seal, and inscribe the phrase “Bảo chi” (Certified) on the front of the cheque and process the copies of the payment order as follows:

- One copy of the payment order shall serve as a document to debit the drawer’s payment account and credit the drawer’s deposit account to secure the funds for the drawer’s cheque.

- One copy of the payment order shall serve as a debit advice to be given to the drawer;

b) Certification of a cheque by temporarily blocking funds in the payment account

The drawer shall prepare and submit to the drawee the cheque with all elements fully filled, signed, and sealed (if any) on its front. The drawee shall check and verify that the conditions in Clause 1 of this Article are met, then temporarily freeze an amount of money in the drawer’s payment account under a written agreement between the drawer and the drawee. The frozen amount of money must be equal to the amount of money for which payment is guaranteed. The drawee shall then sign, affix the drawee’s seal, and inscribe the phrase “Bảo chi” (Certified) on the front of the cheque.

3. Once a cheque is certified, the drawee is responsible for securing payment of the amount of money inscribed in the cheque until the end of its time of presentment.

4. If the cheque is not presented for payment after the time of presentment has expired, the drawer has the right to request the drawee to terminate the temporary block of the amount in the payment account or to cease using the deposit account that was securing payment for such cheque. The drawer’s request to terminate the block or cease the use of the deposit account shall also serve as a stop payment order for such cheque.

Article 17. Cheque guarantee

1. To guarantee a cheque, the guarantor shall inscribe the phrase “bảo lãnh” (guarantee), the guaranteed amount of money, the name, address, and signature of the guarantor, and the name of the guaranteed party on the front of the cheque or on an attached document.

2. In case no guaranteed party is named for the guarantee, it shall be deemed a guarantee for the drawer.

Article 18. Rights and obligations of the guarantor

1. The guarantor may only revoke the guarantee if the cheque lacks the mandatory elements prescribed in Article 6 of this Circular.

2. The guarantor is obliged to pay the amount of money inscribed in the cheque guaranteed if the guaranteed party fails to fulfil or insufficiently fulfils its payment obligation when the cheque is presented for payment.

3. After fulfilling the guaranteed obligation, the guarantor shall assume the rights of the guaranteed party against related persons, dispose of the collateral of the guaranteed party, and has the right to demand that the guaranteed party, the drawer, and any acceptor jointly fulfil the obligation to pay the guaranteed amount of money that has been paid by it.

4. The guarantee of cheques by banks shall be conducted in accordance with this Circular and other relevant law regulations.

Chapter VI

CHEQUE PRESENTMENT AND HONOURING

Article 19. Cheque presentment

A cheque to be presented may be the physical paper document (for paper-based processing) or its corresponding electronic data (for electronic processing) that has been delivered to the place of presentment prescribed in Article 20 of this Circular.

1. The time of presentment for a cheque is 30 days from the drawing date (not including the time during which a force majeure event or objective impediment occurs).

2. If a cheque is presented for payment after the time of presentment but not more than 06 months from the drawing date, the drawee may still honour it, provided that the drawee has not received a stop payment notification for such cheque from the drawer and the drawer has sufficient funds in their payment account for payment thereof.

3. The payee may present a cheque for payment by registered mail through the public postal network. The time of presentment shall be determined by the date on the postmark of the sending post office.

Article 20. Place of presentment

The payee or collecting banker shall present a cheque at one of the following locations:

1. The place of payment inscribed in the cheque.

2. Any business location of the drawee if no place of payment is inscribed in the cheque.

3. In case the presenter of the cheque is a payment service-providing organization, in addition to the locations mentioned above, such organization may present the cheque at a cheque clearing house, provided it is a direct member of such cheque clearing house.

Article 21. Cheque honouring by the drawee

When a cheque is presented for payment within the time of presentment and at the place of presentment prescribed in Article 19 and Article 20 of this Circular, and the drawer has sufficient solvency to pay the amount of money inscribed in the cheque, the drawee shall check the legality and validity of the cheque and is responsible for honouring the cheque for the payee or the payee’s authorized person for a legal and valid cheque on the date of presentment or the working day following it. The drawee shall honour the cheque as follows:

1. The drawee shall receive and check the cheque as follows:

a) Upon receiving the cheque deposit slips along with the cheques submitted by the payee or collecting banker, the drawee must check the elements on the cheques to ensure their legality and validity.

If any errors are found on a cheque deposit slip, the drawee must return the cheque to the presenter and request a new slip that matches the eligible cheques. If there are no errors, the drawee shall sign to confirm receipt of the cheques at the request of the payee or collecting banker;

b) In case the cheque does not bear the phrase “trả vào tài khoản” (pay to account) the drawee may pay in cash at the request of the payee at the places of presentment mentioned in Article 20 of this Circular, unless law regulations prohibit payment in cash.

The person receiving cash must inscribe his/her full name, ID card number or valid passport number, or the number of another legal substitute document, in the section designated for cash payment on the back of the cheque;

c) In case of a violation of cheque control regulations that leads to misuse or loss of assets, the violator shall be responsible for compensation.

2. If the balance in the drawer’s payment account, or the balance plus the overdraft facility (if the drawer is permitted to use one), is sufficient to pay the whole amount of money inscribed in the cheque, the drawee shall process it as follows:

a) Use the cheques as documents to debit the drawer’s payment account or the deposit account securing payment of the cheque;

b) Use the copies of the cheque deposit slip as documents to credit the appropriate account, such as: the payee’s payment account (in case the payee opens such account at the drawee); in cash (in case the payee cashes the cheques); a clearing account or a deposit account at the State Bank (in case the payment is settled through clearing or via the State Bank); or the collecting banker’s account (in case the payment is settled under an agency agreement), etc. At the same time, prepare appropriate payment documents to be sent for clearing (if the collecting banker participates in clearing) or prepare a fund transfer document for the collecting banker to credit the payee’s account;

c) The procedures for payment and document circulation in case the drawer and the payee have payment accounts at the same bank branch, or at two branches of the same bank with an online payment system, shall be prescribed and guided by the Chief Executive Officer (Director) of such branch or bank in accordance with this Circular.

Article 22. Handling of cheques drawn beyond the drawer’s solvency

1. A cheque presented within the time of presentment for which the funds the drawer is entitled to use at the drawee is insufficient to pay the whole amount of money inscribed in the cheque shall be considered a cheque drawn beyond the drawer’s solvency. Such a cheque shall be handled as follows:

a) The drawee shall notify the drawer of the cheque drawn beyond the drawer’s solvency and is responsible for retaining information about such drawer in its records. This notification may be made by telephone, telex, or other appropriate means of communication.

At the same time, the drawee shall notify the presenter (including the payee or the collecting banker) of the cheque drawn beyond the drawer’s solvency on the date of presentment or the working day following it, using a method agreed upon by both parties.

Within a period of 05 working days from the date of sending the notification to the drawer, the drawee shall report the information on the cheque drawn beyond the drawer’s solvency to the National Credit Information Centre of Vietnam using the form in Appendix 07 to this Circular. The National Credit Information Centre of Vietnam is responsible for providing lookup services for the received information on cheques drawn beyond the drawer’s solvency to the cheque supplier on the same day of receiving the request or on the following working day;

b) The payee has the right to request, either directly or through the collecting banker, that the drawee take one of the following two actions:

- Issue a written certification of dishonour for the whole amount of money inscribed in the cheque and return the cheque.

- Pay a part of the amount of money inscribed in the cheque, up to the amount of money the drawer has available at the drawee and issue a written certification of dishonour for the remaining unpaid amount of money on the cheque. (In this case, the payee shall prepare a Collection Order using the form in Appendix 03 to this Circular);

c) Upon receiving a Collection Order from the payee requesting partial payment of the amount of money inscribed in the cheque, the drawee shall proceed as follows:

- Debit the drawer’s payment account and credit the appropriate account (the payee’s payment account; in cash; the clearing account; the deposit account at the State Bank; the collecting banker’s account, etc.).

- Prepare clearing documents (if the collecting banker participates in clearing) or prepare a fund transfer document for the collecting banker to credit the payee’s account, and at the same time:

+ Issue a written certification of dishonour using the form in Appendix 05 and Appendix 06 to this Circular for the unpaid amount of money of the cheque and inscribe the phrase “đã thanh toán...(số tiền)..., từ chối... (số tiền)..., ngày thanh toán...” (paid...(amount of money)..., refused...(amount of money)..., date of payment...) on the front of the cheque. The written certification of dishonour, along with the cheque and other payment documents, shall be sent to the payee or the collecting banker; a copy of the written certification of dishonour shall be sent to the drawer.

+ Prepare a notification of the cheque’s dishonour and send it to the drawer, requesting such person to fulfil his/her payment obligation for the refused amount of money of the cheque and informing the drawer of the potential consequences if such person fail to do so.

The drawee must keep track of partially paid cheques. Information related to the drawer of a cheque drawn beyond his/her solvency must be handled as prescribed in Clause 2 of this Article.

- When partially paying the amount inscribed on the cheque, the drawee shall require the payee (in case of payment to the payee’s payment account at the drawee or payment in cash) or the collecting banker (in case of payment through a collecting banker) to issue a receipt using the form in Appendix 04 to this Circular for record-keeping.

2. In case multiple cheques are presented at the same time for payment from a single drawer whose solvency is insufficient to pay all of them, the order of payment shall be determined by the drawing dates and the serial numbers of the cheques. The cheque with an earlier drawing date shall be honoured first. If the cheques have the same drawing date, the one with the lower serial number shall be honoured first.

Article 23. Honouring a cheque through a collecting banker

1. The collecting banker has the right to set a fee for its cheque collection service for the payee. In case a cheque is dishonoured due to no fault of the collecting banker, the collecting banker is not obliged to refund the collection fee to the payee.

2. In case a cheque is dishonoured due to the fault of the collecting banker, the collecting banker shall be responsible for compensating the payee for damages as agreed upon by the two parties. In case no agreement can be reached, the matter shall be resolved in accordance with law regulations.

3. The procedures for delivering, receiving, and checking cheques at the collecting banker are as follows:

a) Based on the cheques, the payee shall prepare a cheque deposit slip using the form in Appendix 02 to this Circular. The number of copies of the slip shall be determined by the drawee but must be sufficient for accounting, payment, and record-keeping. The slip shall be prepared for each drawee and delivered to the collecting banker along with the corresponding cheques. The elements on the slip must be filled out completely, clearly, and without corrections or erasures;

b) Upon receiving the copies of the cheque deposit slip and the cheques deposited, the collecting banker must check the elements on the cheques to ensure their legality and validity;

c) If any errors are found on the cheque deposit slip or if any cheque does not meet the required conditions, the collecting banker must return the cheque(s) to the presenter and request a new cheque deposit slip that matches the eligible cheques;

d) If there are no errors, the collecting banker shall sign to confirm receipt for collection at the request of the payee and send the cheques and the slip to the place of presentment at the time and by the method agreed upon with the payee, in compliance with the applicable regulations of the drawee.

4. Accounting procedures at the collecting banker:

a) In case of payment of the whole amount of money inscribed in the cheque

Upon receiving the cheque payment documents from the drawee, the collecting banker shall use them to:

- Debit the appropriate account (the clearing account, the deposit account at the State Bank, the drawee’s deposit account, etc.) and credit the payee’s payment account.

- Send a credit advice to the payee;

b) In case of partial payment of the cheque as notified by the drawee

Based on the amount of money paid, the collecting banker shall use the partial payment documents sent by the drawee to:

- Debit the appropriate account (the clearing account, the payment account at the State Bank, the drawee’s payment account, etc.) and credit the appropriate account (other accounts pending payment, etc.).

The payee or the collecting banker (as the authorized representative of the payee) must prepare a receipt using the form in Appendix 04 to this Circular and deliver it to the drawee.

Upon receiving the receipt from the payee, the collecting banker shall prepare a transfer slip and:

- Debit the other accounts pending payment (opening a detailed account for each payee) and credit the appropriate account (the payee’s payment account; in cash).

- Send one copy of the receipt to the drawee;

c) In case, after 05 working days from the date the collecting banker sent the credit advice for partial payment, the collecting banker has not received a receipt from the payee, the collecting banker must return the partially paid amount of money to the drawee and:

Debit the other accounts pending payment (opening a detailed account for each payee) and credit the appropriate account (the clearing account, the payment account at the State Bank, the drawee’s deposit account, etc.).

Article 24. Cheque suppliers

1. Cheque suppliers are responsible for issuing internal regulations guiding the supply of cheques, honouring of cheques, and stop payment of cheques within their organizations in accordance with this Circular.

2. A cheque supplier has the right to agree with another cheque supplier in the same or a different province or city on honouring cheques for the customers of both parties, specifying the operational procedures, authority, and responsibilities of the parties involved, on the basis of being solely responsible for ensuring safety during the payment process, and shall notify and disseminate such information to its customers for implementation.

3. Cheques honoured via a cheque clearing house shall be processed as follows:

a) For cheque clearing houses of the State Bank, the honouring of cheques via a cheque clearing house shall be subject to the clearing process prescribed by the State Bank;

b) For a cheque clearing house that is another organization licensed by the State Bank, cheque clearing shall be conducted under the agreement between such organization and its members.

Article 25. Penalty interest rate

The penalty interest rate for delinquent payment of a cheque, as prescribed in Clause 2, Article 71 of the Law on Negotiable Instruments, shall be 150% of the demand deposit interest rate listed by the cheque supplier at the time of cheque honouring.

Chapter VII

HANDLING OF LOST AND DAMAGED CHEQUES

Article 26. Lost cheques

1. In case a cheque is lost, the following actions shall be taken:

a) If the drawer loses a blank cheque, the person who lost it must immediately notify the drawee in writing or by other forms as agreed upon;

b) If the payee loses a cheque, he/she must immediately report the loss in writing or by other agreed means to the drawee, while also informing the drawer, either directly or via prior endorsers, to request the issuance of a stop payment notification for such cheque by the drawer to the drawee.

2. After reporting a cheque as lost, if the said cheque has not yet been presented for payment, the person who lost it has the right to request the drawer to draw a new cheque with the same particulars as the lost one. The drawer is obliged to fulfil such request.

3. Upon receiving a lost cheque report, the drawee must immediately verify the particulars of the lost cheque and monitor the cheque reported as lost.

The drawee must not honour a cheque that has been reported as lost. If a cheque reported as lost is presented for payment, the drawee is responsible for preparing a record, retaining the cheque, and notifying the person who reported the loss to resolve the matter.

4. The drawee is not responsible for damages caused by the abuse of a lost cheque if, before receiving the report of loss, the cheque had already been presented and honoured in accordance with law regulations.

If the drawee honours a cheque after receiving a report of loss, the drawee shall be responsible for compensating the payee for damages.

5. The drawee is responsible for retaining information about lost cheques and notifying the National Credit Information Centre of Vietnam in writing.

Article 27. Damaged cheques

1. When a cheque is damaged, the payee has the right to request the drawer to draw a new cheque with the same particulars as a replacement.

2. The drawer is obliged to draw a new cheque after receiving the damaged one, provided that the damaged cheque still contains sufficient information or evidence to identify the bearer of the damaged cheque as the legal payee of the damaged cheque.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 28. Effect

1. This Circular takes effect on January 12, 2016.

2. Decision No. 30/2006/QD-NHNN dated July 11, 2006 of the State Bank promulgating the Regulation on the supply and use of cheques, and Article 2 of Circular No. 23/2011/TT-NHNN dated August 31, 2011 on the plan to simplify administrative procedures in payment activities and other fields under the Government’s Resolution on simplifying administrative procedures within the management scope of the State Bank, shall cease to be effective from the effective date of this Circular.

Article 29. Organization of implementation

The Chief of the Ministerial Office, the Director of the Payment Department, the heads of relevant units under the State Bank, the Directors of the State Bank branches in provinces and municipalities, the Chairpersons of the Boards of Directors, the Chairpersons of the Members’ Councils, the Chief Executive Officers (Directors) of commercial banks, foreign bank branches, banks for social policies, cooperative banks, people’s credit funds, and microfinance institutions are responsible for organizing the implementation of this Circular./.