The State Bank of Vietnam has circular No. 18/2021/TT-NHNN regulating the re-discounting of transfer instruments between credit institutions and foreign bank branches.
This Circular applies to credit institutions, foreign bank branches that are re-discounting parties of transfer instruments, and parties to re-discount transfer instruments including commercial banks, cooperative banks, foreign bank branches, financial companies.
Accordingly, the conditions for transfer instruments to be re-discounted are as follows:
- Having been pre-discounted by the party to perform a discount on customers following the Provisions of the State Bank on the discounting of transfer instruments of credit institutions or foreign bank branches for customers;
- Legally owned by the pre-discounted party, allowed to trade following law, without dispute, not in the state being used to secure other obligations;
- Not yet due for payment;
- Intact, not erased, repaired.
Credit institutions, foreign bank branches agree, choose one of the following re-discount methods:
- Term purchase of transfer instruments: The re-discounter purchases and receives the transfer of transfer instruments that are not yet due for payment from the pre-discounted party. The pre-discounted party undertakes to acquire such transfer instruments after a period specified under the agreement.
- Purchase with reserved right to recourse to transfer instruments: The discounter purchases and receives the transfer of the transfer instrument that is not yet due for payment from the pre-discounted party.
In particular, the pre-discounted party shall be responsible for paying the re-discounting party the missing amount as agreed in case the re-discounting party does not receive the full amount paid from the person responsible for payment of such transfer instrument.
Circular No. 18/2021/TT-NHNN takes effect from January 7, 2022.
Source
Linh Trang
