The State Bank has just issued Circular No. 18/2021/TT-NHNN stipulating the rediscounting of commercial papers between credit institutions and foreign bank branches. This Circular takes effect from January 7, 2022.
The Circular clearly states that commercial papers can be rediscounted when: Discounted by the re-discounted party to customers by the State Bank's regulations on discounting commercial papers of credit institutions, foreign bank branches for customers; Legally owned by the rediscountee, allowed to transact by the law, no dispute, not in a state of being used as security for another obligation; Not payment date yet; Intact, not erased, repaired.
The rediscounting party has the right to request the rediscounted party to provide information and documents to prove that the commercial paper is rediscounted as prescribed. The rediscountee is responsible for providing information and documents on the commercial paper at the request of the rediscounting party and is responsible for the accuracy and completeness of the information and documents.
Credit institutions, foreign bank branches may agree and choose one of the following methods of rediscounting:
First, purchase with a term of a commercial paper is the purchase and receipt by the rediscounting party of a commercial paper that has not yet been due from the rediscountee, and the rediscountee undertakes to repurchase that commercial paper after a period determined by the rediscount agreement.
Second, purchase with recourse to recourse to the commercial paper is the purchase and receipt by the rediscounting party of the commercial paper from the rediscountee; the rediscountee shall be responsible for paying the rediscounting party the outstanding amount under the agreement if the rediscounter does not receive the full amount paid from the person responsible for paying such commercial paper.
For commercial papers payable in Vietnam dong, credit institutions and foreign bank branches shall rediscount in Vietnam dong.
For commercial papers payable in foreign currency: Credit institutions, foreign bank branches shall rediscount in foreign currency stated on such commercial paper or in Vietnam dong as agreed.
In case of rediscounting in Vietnam dong, the parties shall agree on the applicable exchange rate following the regulations of the State Bank on the exchange rate; In case of rediscounting a commercial paper by the method of term purchase, a credit institution or foreign bank branch shall redeem the commercial paper in the currency of the sale of such commercial paper.
Collected from source
TH