‘Rubber’ cheques will be bounced out of Vietnam

The government wants to encourage people to pay by cheque rather than cash

With dishonoured – or rubber – cheques remaining a major factor in deterring people from accepting them, the new government regulations will immediately and permanently take away the right to issue cheques from issuers of bounced cheques.
Not only will they be forbidden to issue cheques on their own bank but also on any other bank.
“More and more people sign cheques without caring if there is enough money in their account,” head of the State Bank’s monetary policy department, Nguyen Dong Tien, said.
“This, done usually on purpose, causes trouble and wastes time for both parties and the paying banker.”
With the old rules governing the issue not having any teeth, rubber cheques were issued as a matter of course to delay payment.
Tien said this slowly destroyed people’s trust in cheques and put paid to their use.
Figures from the State Bank’s Credit Information Centre show that cheques account for just 0.2 per cent of total non-cash payments in Vietnam. It is over 30 per cent in China, equal to payments done by credit cards. Even in developed countries like France, where payment cards are highly developed, cheques account for up to 70 per cent.
The new regulations also extend the time limit for presenting cheques from the existing 15 days to 30. Moreover, a cheque presented after 30 days but within six months can still be paid if there is no ‘stop payment’ order.
In a further effort to make cheques attractive, the government has also cracked down on delayed payments by banks.
They are required to pay a cheque within one day from the date of presentation if there is sufficient balance in the issuer’s account. If a bank fails to do so, it has to compensate the beneficiary by paying interest at double the prime rate set by the State Bank for each day of delay.