Time limit for rediscounting negotiable instruments between credit institutions in Vietnam

Bao Ngoc

09:03, 19/11/2021

On November 18, 2021, the State Bank of Vietnam promulgated Circular 18/2021/TT-NHNN on rediscounting of negotiable instruments between credit institutions and foreign bank branches.

According to the Circular, the time limit for rediscounting a negotiable instrument is a period determined from the date the rediscount party receives the rediscount of the negotiable instrument to the date the rediscountee has to fulfill the obligation to commit to repurchase or up to the due date for payment of the full amount stated on such negotiable instrument, including weekends and public holidays.

The rediscounting party and the rediscountee agree that the rediscount period of the guaranteed negotiable instrument is less than 12 months and does not exceed:

- The date the rediscountee has to perform the obligation to resell that negotiable instrument to the customer (for the case where the rediscountee discounts the negotiable instrument from the customer according to the term purchase method); or

- The due date for payment of the full amount stated on that negotiable instrument (in case the rediscountee discounts the negotiable instrument from the customer by the method of purchase with recourse rights reserved).

Circular 18/2021/TT-NHNN of Vietnam takes effect from January 7, 2022.

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