Laws of Vietnam

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on bank card issuance, use and payment.

Article 2.- This Decision takes effect as from November 1, 1999 and replaces the following provisions on cards in various documents issued by the State Bank Governor:

1. Article 2, Clause 1.2 of Decision No. 162/QD-NH2 of August 19, 1993 on the collection of service charges paid via banks; Article 24 of the non-cash payment Regulation issued together with Decision No. 22/QD-NH1 of February 21, 1994; Part II, Section G of Circular No. 08/TT-NH2 of June 2, 1994 guiding the implementation of the non-cash payment Regulation.

2. Other documents issued by the State Bank Governor before the date this Decision takes effect and contrary to the provisions of this Decision shall cease to be effective.

Article 3.- The director of the State Bank’s Office, the head of the Monetary Policy Department, heads of the units attached to the State Bank, directors of the State Bank’s branches in provinces and cities; chairmen of the Managing Boards and general directors (directors) of the commercial banks, the development banks, the investment banks, the policy banks, the cooperation banks and other types of banks as well as concerned organizations and individuals shall have to implement this Decision.

For the State Bank Governor
Deputy Governor
DUONG THU HUONG

Chapter I

GENERAL PROVISIONS

Article 1.- Regulation scope and application objects

1. This Regulation shall regulate the activities of bank card issuance, use and payment in the Socialist Republic of Vietnam.

2. The application objects of this Regulation shall include units and individuals involved in bank card issuance, use and payment in the Socialist Republic of Vietnam.

Article 2.- Interpretation of terms

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

1. "The bank card" (hereinafter called "card" for short) is a payment instrument issued by a card-issuing bank to customers for use under the contract signed between the card-issuing bank and the card holders.

2. "The domestic card" is the card issued by the card-issuing bank in Vietnam, which is used for payment in the Socialist Republic of Vietnam.

3. "The international card" is the card issued by the card-issuing bank in Vietnam, which is used for payment within and without the territory of Vietnam or the card issued abroad but used for payment in the Socialist Republic of Vietnam.

4. "The card holder" is the person granted the card for use by the card-issuing bank, including the primary card holder and the secondary card holder.

5. "The primary card holder" is the person who applies for the card and is granted the card for use by the card-issuing bank.

6. "The secondary card holder" is the person who is granted the card at the proposal of the primary card holder.

7. "The units involved in the bank card issuance, use and payment" are commercial banks, development banks, investment banks, policy banks, cooperation banks, and banks of other types, and card accepting units.

8. "The card-issuing bank" (abbreviated as CIB) is the bank permitted by the State Bank to perform the operations of card issuance and card granting to card holders being individuals, responsible for the payment and provision of services related to such cards.

9. "The card payment bank" (abbreviated as CPB) is the bank authorized by the card-issuing bank to provide the card payment services under contracts; or is the official member or partnership member of an international card organization that provides the payment services under accords signed with such international card organization. The card payment bank shall sign contracts directly with units accepting the card in order to receive and handle card transactions at the card-accepting units, provide support services and guidance for the card-accepting units.

10. "The card-accepting unit" (abbreviated as CAU) is the organization or individual that accepts the payment for goods or services by cards under the contract signed with the card-issuing bank or the card payment bank.

11. "The automatic teller machine" (ATM) is the equipment which can be used by card holders to withdraw cash or receive a number of other services provided by the card- issuing bank or/and the card payment bank.

12. "The card transaction" means the use of card by the card holder to pay for the goods or services to the CAU or/and to withdraw cash.

13. "The card holder’s personal identification number " (PIN) is the personal code number set for each card by the card-issuing bank and used in some forms of card transaction.

14. "The card account" is the account of the primary card holder, which is opened and managed by the card-issuing bank, the secondary card holder shall share the same card account with the primary card holder.

Article 3.- General provisions on card types, card holders and details on cards

1. Cards applicable in this Regulation shall include the following types:

a/ The payment card is the card used by the card holder to pay for the purchase of goods or services, to withdraw cash within the limit of the balance on his/her deposit account at the CIB.

b/ The credit card is the type of card which permits the card holder to pay for the purchase of goods or services and/or to withdraw cash within the credit limit approved by the CIB under contract.

2. The CIB may grant cards only to card holders being individuals (the primary card holder and the secondary card holder). The CIB shall not grant cards to card holders being organizations.

3. The card must contain the following details:

a/ The name of card holder;

b/ The name of the CIB;

c/ The card number;

d/ The commercial mark;

e/ The card use duration.

The CIB may prescribe other details which are not contrary to law.

Article 4.- General provisions on lending to credit card holders

1. When granting the credit card, the CIB shall consider and grant the card holder a certain credit limit. The card holder must not spend beyond the credit limit approved by the CIB in the contract. Where he/she wishes to spend beyond the limit, he/she must reach agreement with the CIB in the contract.

2. A credit card’s credit limit for a customer shall lie in the total lending amount for that customer and such total lending amount must not exceed the maximum lending limit of the bank for a customer as prescribed by law.

3. The card credit debit balance shall be calculated into the total lending balance of the CIB.

4. The CIB shall set the time limit for debt repayment and the minimum debt repayment level calculated on the card credit debit balance for credit card holders. The card holders shall have to repay the minimum debt repayment levels in full and on time as stipulated by the CIB. If past the prescribed time-limit a card holder remains unable to pay the debt, the CIB shall handle the case according to the current law provisions.

5. The card holders shall have to pay the CIB the interests on card credit balance not yet paid on time. The interest rates shall be prescribed by the CIB and shall not contravene the State Bank’s current regulations on the lending interests.

Article 5.- Card payment currency

1. In card transactions at the CAUs, CPBs and CIBs:

a/ The domestic card: The domestic cards shall be transacted only in Vietnam dong.

b/ The international card:

b.1. The international cards issued by the CIBs in Vietnam and transacted inside and outside the Vietnamese territory:

- In the Socialist Republic of Vietnam: The international cards shall be transacted in Vietnam dong. The card holders may only use cards to effect transactions in foreign currencies with organizations and individuals that are permitted to collect foreign currencies according to the provisions of current legislation on foreign exchange management.

- Outside the Socialist Republic of Vietnam: The card holders being individual residents and non-residents may use cards to effect transactions in foreign currencies outside the Vietnamese territory only when so permitted by the CIBs in Vietnam. The foreign currency amount to be used by each card holder overseas in the international card must be compatible with the level prescribed by the current legislation on foreign exchange management.

b.2. The international cards issued overseas and transacted inside the Vietnamese territory:

- The card holders may use cards to effect transactions in Vietnam dong at CAUs and may use cards to effect transactions in foreign currencies with organizations and individuals that are permitted to collect foreign currencies according to the provisions of current legislation on foreign exchange management.

- The card holders may withdraw Vietnam dong in cash only at the CPBs licensed to conduct foreign exchange activities. In cases where cards are used to withdraw cash in foreign currencies according to the current provisions of the legislation on foreign exchange management, such can be effected only at the transaction counters of the CIBs or the CPBs.

2. In the card payment between the CPBs and the CAUs:

The payment between the CPBs and the CAUs can be effected only in Vietnam dong.

Chapter II

CARD ISSUANCE

Article 6.- Conditions for card issuance

The State Bank shall permit the performance of card issuing operations when the banks applying therefor meet all the following conditions:

1. For domestic card issuance: The applying banks shall meet all the following conditions:

a/ Having the financial capability, not violating laws;

b/ Being furnished with a system of necessary equipment which is up to the standards and ensures the safety for card issuance and payment operations. Being staffed with a contingent of officials professionally capable of operating and managing this system according to international practices;

c/ Being able to prove the necessity, business efficiency and feasibility of the investment in the card issuance and payment system.

d/ Reporting and fully and accurately supplying relevant information and documents at the request of the State Bank when the applications for card issuance are considered.

2. For international card issuance

In addition to the conditions prescribed in Article 6, Clause 1, the banks applying for the international card issuance shall also have to satisfy the following conditions:

The applying banks must be licensed for foreign exchange activities and permitted to provide the international payment services by the State Bank, and at the same time must be the official members of the international card organization.

Article 7.- Dossiers of application for card issuance

A dossier of application for card issuance shall include:

1. For domestic card issuance.

a/ The application for performance of card issuance operations;

b/ The copy of the business registration certificate of the applying bank.

c/ The copy of the establishment and operation permit of the applying bank;

d/ Documents fully evidencing the equipment and facility system in service of the card issuance and payment;

e/ The plan for the operation of the card issuance and payment system. The plan must prove the necessity, business efficiency and feasibility of the performance of the card issuance operation;

f/ Other relevant documents at the request of the State Bank so as to clarify the conditions ensuring the performance of the card issuance operation as provided for in Article 6 of this Regulation.

2. For the international card issuance:

In addition to the documents prescribed in Article 7, Clause 1, a dossier of application for international card issuance shall also include:

a/ The permit for foreign exchange activities and international payment performance;

b/ The agreement on the granting of membership permit, signed between the applying bank and the international card organization.

Chapter III

USE OF CARD

Article 8.- Conditions for use of cards

1. For the primary card holders, the following conditions must be fully met:

- Having full civil act capacity as prescribed by law;

- Being the owners of personal deposit accounts opened at CIBs (if using the payment card);

- Satisfying conditions on credit guarantee and other conditions set by the CIBs (if using credit cards).

2. For the secondary card holders, the following conditions must be fully met:

- Having full civil act capacity as prescribed by law;

- Having the primary card holders’ commitment to pay all payable amounts, interests and fees arising when the cards are used;

- Satisfying other conditions of the CIBs.

Article 9.- Contracts for the use of cards between CIBs and card holders

The use of card must be made in writing in the form of card-using contract according to form set by the CIB, which includes the following details:

a/ The date of signing the contract; the name of the lawful representative of the CIB; the full name and address of the card holder;

b/ The type of card, services received when using card; the scope and duration of the use of card;

c/ Norms when using the card;

d/ The fee level, type of fee and way of fee collection from the card holder;

e/ The rights and obligations of parties;

f/ The liabilities incurred due to breach of the contract, cancellation of the contract;

g/ The effective duration of the contract;

h/ Other regulations or agreements.

Enclosed with the contract may be its appendices which detail and concretize provisions of the contract.

Article 10.- Scope of card use

1. Cards are used to pay for the purchase of goods or services at CAUs or to withdraw Vietnam dong in cash at CIBs, CPBs and ATM and to receive other services provided by CIBs. Where permitted by the CIBs or the CPBs, cards may be used for withdrawal of Vietnam dong in cash at CAUs.

2. The use of card to pay for purchased goods and services in foreign currency(ies) shall only be effected outside the Vietnamese territory or at the organizations or individuals inside the country, that are licensed to collect foreign currencies. CIBs and CPBs may only permit card holders to withdraw foreign currencies in cash at their transaction counters according to the current provisions of the legislation on foreign exchange management; the CIBs and CPBs must not permit the card holders to use their cards for withdrawal of foreign currencies at ATMs inside the country.

Article 11.- The card- using duration

The card-using duration shall be determined by the CIBs. Particularly for credit cards, the maximum time limit shall not exceed three (03) years after the card is issued.

Article 12.- Fee

The card holders shall have to pay fee to the CIBs. The fee levels and types shall be determined by the CIBs, depending on the types of card to be used and services which the card holders are provided with when using their cards in conformity with the provisions of law.

Article 13.- Notification of card loss or PIN disclosure

1. The card holders shall have to preserve their cards, shall not let other persons use them and keep secret the cards’ PINs.

If a card holder loses his/her card or lets his/her card’s PIN disclosed or doubts that it has been disclosed to other persons who may make use of the card, he/she shall have to immediately notify the CIB thereof and confirm this in a written notification sent to the CIB (if notification in other forms was made earlier). The card holder shall have to pay a fee according to the provisions agreed upon in the contract with the CIB.

2. The CIB shall have to immediately confirm to the card holder that is has received the written notification of the card loss or PIN disclosure by the former.

3. Where a card holder loses his/her card or discloses its PIN so that another person makes use of it before the CIB makes the confirmation, he/she shall have to bear the loss and compensate for damage caused by his/her letting the card to be taken advantage of.

4. Where a card is taken advantage of after the CIB confirms its receipt of the card holder’s notification of card loss or PIN disclosure, the CIB shall have to bear all the losses caused by the taking advantage of the card in strict accordance with the agreement in the card-using contract.

5. CIBs may buy insurance for card operations (if any) or made deductions for setting up the risk reserves in order to cover the risks arising from the banks’ card issuance operations.

Chapter IV

CARD PAYMENT

Article 14.- Payment between card holders and CIBs

Periodically the CIBs shall make and send lists of card transactions and bills of credit amounts, interests thereon (if any) and fees to the card holders. The card holders shall have to pay the credit amounts, interests and fees listed on the bills according to the CIBs’ regulations.

The card holders may authorize the CIBs to make deductions from their accounts for payment of loans, interests and fees arising when using their cards. The authorization shall comply with the written agreement.

Article 15.- Organizing the card payment

1. For domestic cards, the CIBs shall sign card payment contracts with the CPBs and the latter shall sign card payment contracts with the CAUs agreeing on the organization of payment between concerned card transaction makers. Where a CIB is also a CPB, such CIB shall sign a card payment contract directly with CAUs.

In cases where a CIB and a CPB belong to one banking system, the organization of internal payment within the system shall be decided by the general director of such bank.

2. For international cards, the organization of card payment shall comply with the following principles:

- Where an international agreement which the Socialist Republic of Vietnam has signed or acceded to contains provisions different from those of this Regulation, the provisions of such international agreement shall apply.

- Parties engaged in the card payment organization may agree on the application of international practices if such practices do not contravene laws of the Socialist Republic of Vietnam.

Article 16.- Card payment contracts

1. The card payment contracts must be made in writing and contain the following principal contents:

a/ Day, month and year of signing the contract; names and addresses of parties, full names of the representatives at law;

b/ Object of the contract: Contents of the work; card services to be provided;

c/ Measures to ensure safety in the card payment services;

d/ Fees and methods of collecting fees related to card services;

e/ The mode of payment between the parties;

f/ The rights and obligations of the parties;

g/ Liabilities incurred due to breach of the contract, cancellation of the contract;

h/ The effective duration of the contract;

i/ Other agreements.

2. Enclosed with the contract may be its appendices which detail and concretize the provisions of the contract.

Article 17.- Notifying the refusal of card payment

1. The CIBs shall notify and request the CPBs or the CAUs to refuse making the payment in the following cases:

a/ The card is fake or related to fake transactions;

b/ The card has been lost or its PIN has been disclosed as notified by the card holder;

c/ The card’s account has been finally settled.

d/ The card holder fails to pay fully or on time the credit amounts, the interests or fees as prescribed;

e/ The card holder fails to comply with other regulations on the use of card, which have been announced by the CIB.

f/ The card holder breaches the card payment regulations of the international card organization and Vietnam State Bank.

2. These notifications shall take effect immediately after the concerned parties receive them.

3. After such notifications take effect, the units which have already received the notifications but still let cards to be taken advantage of, thus causing losses, shall have to fully bear the losses, except where otherwise agreed upon by the concerned parties.

Chapter V

RIGHTS AND RESPONSIBILITIES OF PARTIES

Section I. THE RIGHTS AND RESPONSIBILITIES OF THE CARD
ISSUING BANKS

Article 18.- The rights of the CIBs

1. Towards the card holders:

a/ To stipulate the types of card and the scope of card use; prescribe the card use duration; set conditions for the use of card in compliance with Article 8 of this Regulation; extend the card use duration or change the card;

b/ To request the card holders to fully supply necessary information and documents for clarifying the conditions for the use of cards by customers when they apply for the use of card and during the course of their use of cards;

c/ To refuse to grant cards if customers fail to fully satisfy the conditions for card use; to decide the withdrawal of cards in the course of their use if the card holders fail to fully comply with the terms and conditions in the card use contracts and the card holders shall have to fully bear the losses caused by the card withdrawal;

d/ To increase or reduce the credit limits for card holders; to decide the recovery of money amounts lent by the CIBs to card holders in their card accounts; to determine forms of ensuring credit for card use; to determine the interests and interest rates on loans lent to card holders in compliance with the current regulations of the State Bank, as well as types and levels of fee.

e/ To gather information on card holders from other organizations;

f/ Other rights under the card use contracts.

2. Towards the CPBs and the CAUs:

a/ To request CPBs and/or CAUs to apply necessary measures to ensure safety in card payment and shall not have to bear responsibility for losses caused by the CPBs’ and/or CAUs’ failure to comply with such requests;

b/ To request CPBs and/or CAUs to supply necessary information related to the card holders’ card transactions at the concerned CPBs and the CAUs;

c/ To request CPBs and/or CAUs to return the money if the card transactions have been effected not in accordance with the signed payment contracts;

d/ Other rights under the card payment contracts.

Article 19.- Responsibilities of the CIBs

1. To abide by the card issuance regulations of the international card organization and the Vietnam State Bank.

2. To register card specimen and commercial marks printed on the cards at the State Bank;

3. To settle or reply card holders’ complaints related to card use and payment;

4. To fully and promptly pay the CPBs and CAUs for all card transactions effected in strict accordance with the contracts.

5. To guide the CPBs to comply with the technical, operation and confidentiality processes related to card transactions with the card holders and request the CPBs to reguide the CAUs in such processes;

6. Other responsibilities under the card use contracts and the card payment contracts.

Section II. RIGHTS AND RESPONSIBILITIES OF THE CARD HOLDERS

Article 20.- Rights of the card holders

1. To use cards to pay for purchased goods and services without any price differentiation as compared to the payment in cash and without having to pay any additional amount or surcharge to the CAUs;

2. To use cards to withdraw cash from ATMs, CPBs and from CAUs if so permitted by CIBs or CPBs;

3. Complaints against the CAUs shall be made in the following cases:

a/ There are errors or doubts about errors in the card transactions bills periodically made and sent to card holders by the CIBs;

b/ CAUs refuse to accept the payment by cards and request the card holders to make the payment in cash or other means for the purchased goods and/or provided services when the card holders have produced and used their cards in accordance with the regulations;

c/ CAUs raise the prices of goods and/or services or make price differentiation when accepting the payment by cards as compared to the payment in cash;

d/ CAUs request the card holders to pay surcharges for card transactions;

e/ Other breaches of card use contracts by the CIBs.

Complaints must be made in writing and sent to the CIBs within 7 working days as from the date the CIBs send the bills to the card holders (for cases mentioned at Point a) or from the date the card holders’ rights and interests are infringed upon (for cases at Points b, c, d and e).

4. Other rights under the card use contracts.

Article 21.- Responsibilities of the card holders

1. To provide fully and accurately all necessary information at the request of the CIBs when applying for the granting of cards and in the course of using cards;

2. To pay to the CIBs fully and on time loans, interests and fees arising from the use of cards according to the regulations of the CIBs; to pay to the CIBs the whole amounts lent on their card accounts by the CIBs according to the agreement in the card-using contracts;

3. When the card use duration expires or a card holder no longer wishes to use the card, the card holder shall have to return the card to the CIB;

4. The primary card holders and the secondary card holders shall bear their joint responsibilities and each shall bear his/her personal responsibility in the implementation of the provisions and conditions in the card-using contracts between the card holder and the CIBs. The primary card holders are the persons who have to pay to the concerned CIBs all transactions of payment for purchased goods and/or provided services and the cash withdrawals with the card holders having signed on the invoices as well as having used PIN. Where a primary card holder dies, is reported missing or loses his/her act capacity, the payment to the concerned CIB shall comply with the provisions of law.

Section III. RIGHTS AND RESPONSIBILITIES OF THE CARD PAYMENT BANKS

Article 22.- Rights of the CPBs

1. To request the CIBs to pay fully and on time for all card transactions implemented in strict accordance with the card-using contracts;

2. To request the CAUs to reimburse the money already paid for the card transactions implemented not in accordance with the card-using contracts;

3. To request the CAUs to supply necessary information related to the card transactions of the card holders at such CAUs;

4. To seize cards according to the provisions in Article 28 of this Regulation;

5. Other rights under the card payment contracts.

Article 23.- Responsibilities of the CPBs

1. To provide guidance on measures, operation technicial processes and confidentiality in the card payment for CAUs, card payment agency banks according to the CIBs’ regulations. The CPBs shall have to bear responsibility for the losses caused by their failure to comply with this provision;

2. To notify the CIBs’ requests to the CAUs;

3. To meet the CIBs’ requirements on the card holders’ card transactions at the concerned CAUs;

4. Other responsibilities under the card payment contracts.

Section IV. RIGHTS AND RESPONSIBILITIES OF THE CARD-ACCEPTING UNITS (CAUs)

Article 24.- Rights of the CAUs

1. To request the CIBs and the CPBs to fully and promptly pay for the card transactions implemented in strict accordance with contracts;

2. To check the card validity or card criteria under the regulations of the CIBs or the CPBs and refuse to accept cards when the cards are no longer valid or fail to meet the prescribed conditions;

3. To seize cards as prescribed in Article 28 of this Regulation;

4. Other rights under the card payment contracts.

Article 25.- Responsibilities of the CAUs

1. To fully comply with the operation technicial processes related to card transactions of the card holders, as required and guided by the CPBs or the CIBs; to bear responsibility for the losses incurred if they fail to comply with the requirements of the CIBs or the CPBs;

2. To keep secret all information related to cards and their holders, except for cases where information are supplied:

a/ At the request of the card holders;

b/ At the request of CPBs or CIBs;

c/ Under the law provisions.

3. Other responsibilities under the card payment contracts.

Chapter VI

ACCOUNTING, REPORTING

Article 26.- Accounting

The accounting and book-keeping related to card transactions at the CIBs and CPBs shall comply with the accounting system issued by the State Bank.

Article 27.- Reporting

1. Quarterly, biannually and annually, the CIBs and the CPBs shall have to report on their card issuance and card payment operations according to specific norms prescribed by the State Bank.

2. In addition to the periodical reports, the CIBs and the CPBs shall have to send reports to the State Bank in the following cases:

a/ Where the reports are used in service of the State Bank’s specific objectives in each period when performing its functions;

b/ Where there appear unexpected developments in the issuance and/or payment operations as well as in the recovery of debts from card holders, which may affect the banks’ operations.

Chapter VII

HANDLING OF VIOLATIONS

Article 28.- Seizure of cards

The CIBs, the CPBs, the CAUs and the law enforcement bodies are entitled to seize cards in the following cases, where:

1. They are fake cards;

2. The card users fail to prove that they are the card holders;

3. The card holders fail to comply with the regulations of the CIBs (or the international card organization which such cards bear the commercial mark of) on the use of cards;

4. It is requested by the CIBs (or the international card organization which such cards bear the commercial mark of).

Article 29.- Acts to be strictly prohibited

1. Making, using and circulating fake cards;

2. Assignment of cards by card holders to other persons;

3. Using cards not issued to such users themselves by the CIBs;

4. Deliberately declaring false personal details or counterfeiting papers when applying for card use or in the course of using cards;

5. Deliberately using cards which have been announced being banned from circulation;

6. Infiltrating or seeking to illegally infiltrate in the programs or data base in the computer networks of the card issuance and payment system;

7. Making sham card transactions.

Article 30.- Handling of violations

Organizations and/or individuals that violate provisions in this Regulation shall, depending on the nature and seriousness of the violations, be administratively handled or examined for penal liability; if causing damage, they must compensate therefor according to the provisions of law.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 31.- All amendments and/or supplements to this Regulation shall be decided by the State Bank Governor.

For the State Bank Governor
Deputy Governor
DUONG THU HUONG