What is rediscount agreement among credit institutions and foreign bank branches in Vietnam?

What are regulations on rediscount agreement among credit institutions and foreign bank branches in Vietnam?

Pursuant to Article 9 of Circular 18/2021/TT-NHNN regulating rediscount agreement among credit institutions and foreign bank branches is specified as follows:

1. Negotiable instrument rediscount agreement between credit institutions and FBBs must be presented in format deemed suitable with regulations of the law and must contain the following details:

a) Information on the rediscounting party and the beneficiary;

b) Information on discounted negotiable instrument;

c) Method of rediscount;

d) Rediscount currency;

dd) Negotiable instrument rediscount price, payment date, payment method;

e) Duration of rediscount;

g) Rediscount interest rate;

h) Rights and obligations of the parties;

i) Penalties.

2. When rediscounting negotiable instruments in form of temporary purchase, in addition to details under Clause 1 of this Article, negotiable instrument rediscount agreement must include guarantee to repurchase negotiable instruments and repurchase price of negotiable instruments.

3. When rediscounting negotiable instruments in form of purchase with rights of recourse, in addition to details under Clause 1 of this Article, negotiable instrument rediscount agreement must include responsibility of the beneficiary to incur the remaining amount for the rediscounting party if the person or persons liable to pay for the negotiable instruments fail to do so adequately.

4. In addition to details under Clause 1, Clause 2, and Clause 3 of this Article, credit institutions and FBBs may agree to include other details in a manner conforming to this Circular and other law provisions.

Best Regards!