Vietnam: Does a bank have the right to freeze accounts receiving mistaken or erroneous amounts from July 1, 2024?
Does a bank in Vietnam have the right to freeze accounts receiving mistaken or erroneous amounts from July 1, 2024?
On May 5, 2024, the Government of Vietnam issued Decree 52/2024/ND-CP regulating cashless payments.
In Clause 1, Article 11 of Decree 52/2024/ND-CP on payment account freeze in Vietnam:
Payment account freeze
1. Payment accounts shall have their balances partly or wholly frozen in the following cases:
a) When there are prior agreements between owners of payment accounts and payment service providers or requests from owners of payment accounts;
b) When there are decisions or written requests from competent authorities as prescribed by the law;
c) When payment service providers detect mistakes or errors when writing “Yes” into payment accounts of clients or carry out refund orders of money transfer service providers due to mistakes and errors compared to payment orders of transferring parties after writing “Yes” into payment accounts of clients. The frozen amount on a payment account shall not exceed the mistaken or erroneous amount;
d) When there are requests for the freeze from one of the owners of a general payment account, excluding cases where there are prior written agreements between the payment service provider and the owners of such a general payment account.
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Thus, according to the above regulation, when the bank detects mistakes or errors when writing “Yes” into payment accounts of clients or carries out refund orders of money transfer service providers due to mistakes and errors compared to payment orders of transferring parties after writing “Yes” into payment accounts of clients.
The frozen amount on a payment account shall not exceed the mistaken or erroneous amount.
Does a bank in Vietnam have the right to freeze accounts receiving mistaken or erroneous amounts from July 1, 2024?
What are the cases of termination of payment account freeze in Vietnam?
Clause 2, Article 11 of Decree 52/2024/ND-CP stipulates the termination of payment account freeze in Vietnam as follows:
Payment account freeze
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2. The termination of payment account freeze shall be carried out when:
a) There are written agreements between owners of payment accounts and payment service providers or requests from owners of payment accounts;
b) There are decisions to terminate the freeze of competent authorities as prescribed by the law;
c) The mistakes and errors in money transfer payment are processed according to Point c Clause 1 of this Article;
d) There are requests for the termination of the freeze from all of the owners of a general payment account or prior written agreements between the payment service provider and owners of such a general payment account.
3. Payment service providers, owners of payment accounts, and competent authorities, when freezing either by themselves or at the requests of others contrary to the law that causes damage to owners of payment accounts, shall provide compensations as prescribed by the law.
Thus, the termination of payment account freeze shall be carried out when:
- There are written agreements between owners of payment accounts and payment service providers or requests from owners of payment accounts;
- There are decisions to terminate the freeze of competent authorities as prescribed by the law;
- The mistakes and errors in money transfer payment are processed according to Point c Clause 1 of this Article;
- There are requests for the termination of the freeze from all of the owners of a general payment account or prior written agreements between the payment service provider and owners of such a general payment account.
What are the prohibited acts in cashless payments from July 1, 2024 in Vietnam according to Decree 52?
Article 8 of Decree 52/2024/ND-CP stipulates the prohibited acts in cashless payment from July 1, 2024:
- Altering and erasing payment instruments and payment documents contrary to the law; forging payment instruments and payment documents; storing, selling, transferring, and using counterfeit payment instruments.
- Infiltrating or attempting to infiltrate, steal data, sabotage, or make illegal changes to software programs or databases used in payment; taking advantage of computer network errors for profiteering purposes.
- Providing untruthful information related to the provision or use of payment services and payment intermediary services.
- Disclosing or providing information on the balances of payment accounts, bank cards, or e-wallets and payment transactions of clients at payment service providers or payment intermediary service providers contrary to relevant laws.
- Opening or maintaining anonymous or impersonating payment accounts or e-wallets; purchasing, selling, hiring, leasing, borrowing, and lending payment accounts or e-wallets; hiring, leasing, purchasing, and selling bank cards or opening bank cards on behalf of others (excluding cases of anonymous prepaid cards); stealing or colluding with others to steal, purchase, or sell information on payment accounts, bank cards, or e-wallets.
- Issuing, providing, and using illegal payment instruments.
- Providing payment intermediary services without licenses to provide payment intermediary services issued by SBV. Providing payment services without being payment service providers.
- Performing, organizing, or enabling the following acts: using or taking advantage of payment accounts, payment instruments, payment services, or payment intermediary services to commit gambling, organize gambling, rig, deceive, and commit illegal trading and other illegal acts.
- Erasing and altering contents of licenses to provide payment intermediary services and purchasing, selling, transferring, leasing, lending, and forging such licenses.
- Authorizing or assigning other organizations or individuals to carry out licensed operations of agents according to licenses to provide payment intermediary services.
- Falsifying or forging documents proving eligibility for the issuance of licenses to provide payment intermediary services in applications for licenses.
- Operating contrary to contents prescribed in licenses to provide payment intermediary services.
- An owner of a payment account at a specific payment service provider that provides information for or commits to not having a payment account at another provider of payment services for parties with relevant rights and obligations according to the law on the disbursement of loans of credit institutions and foreign bank branches.
Decree 52/2024/ND-CP takes effect from July 1, 2024.
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