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Re: China &Vietnam/ Funny things about VNese checks
On Wed, 19 Mar 1997, Tuan Pham wrote:
> That VN wasted more than a decade or peace and is consequently
> at least ten years behind China only makes it more essential
> that we catch up on lost time. Now is not the time to
> lose heart - China has its own problems and it is possible
> to catch up and surpass it if the right policies are
> followed. But VN must work hard AND smart. There's no quick,
> easy solution.
Hi all, somehow I have the feeling that we are not going to catch up and
surpass China after all; and that perhaps we are working hard (?), but
not very smart. Read this:
-------------------
Unlike its fellow members in the Association of Southeast
Asian Nations where checks are valid for six months and
allow the use of English, Vietnam has ruled that checks
will only be valid for 15 days and that they must be
written in Vietnamese.
English can be used as a second language as long as the
lettering is smaller than the Vietnamese writing.
The regulations, which go into minute detail unimaginable
in other countries, come into effect from April 1. They
were described by some bankers as yet another example of
Vietnamese over-regulation.
----------------------
"English can be used...as long as the lettering is smaller than the
Vietnamese writing"
:-) :-(((((( . Now, what sort of "ti'nh ca'ch ngu+o+`i Vie^.t" is on
display here? "Stupid overpride", that overrides all practical
reasoning???
The full article from Asia Times:
--------------------------------
Vietnam banking made more difficult
Andy Soloman, Hanoi, 13th March 1997
Foreign bankers are expressing dismay about new
regulations governing the use of bank checks in Vietnam
that appear to fly in the face of government policy to
suck money into the banking system.
Unlike its fellow members in the Association of Southeast
Asian Nations where checks are valid for six months and
allow the use of English, Vietnam has ruled that checks
will only be valid for 15 days and that they must be
written in Vietnamese.
English can be used as a second language as long as the
lettering is smaller than the Vietnamese writing.
The regulations, which go into minute detail unimaginable
in other countries, come into effect from April 1. They
were described by some bankers as yet another example of
Vietnamese over-regulation.
"It doesn't encourage the use of checks as a preferred
method of payment. In fact, it actually discourages the
use of checks and it will perpetuate the cash society,"
said Allan Marlin, general manager of ANZ Bank in Hanoi.
A Western bank manager in Hanoi said: "The check
procedure is too complicated and will discourage people
from using this method of payment. Our initial reaction
is to ... tell [customers] not to use checks. Our
recommendation will be that writing out checks is too
complicated and you're better off using cash."
He added that the over-regulation, rather than protecting
payees, could result in more checks being dishonored.
In recent years the government has put pressure on the
State Bank, the country's de facto central bank, and the
Ministry of Finance, to increase cash volumes entering
the banking sector by encouraging non-cash settlement
options.
Vietnam remains an overwhelmingly cash-based society, and
the majority of the population hold a long-standing and
deep-seated mistrust of banks. Estimates indicate that as
much as US$3 billion in savings may be held in gold and
US dollars outside the banking system.
At year-end 1996, Vietnam's population of 75 million held
fewer than 41,000 private checking accounts, containing
the equivalent of US$71 million.
Domestic savings within the banks, though not uniquely
private checking accounts, accounted for about 18 percent
of gross domestic product, up from 11.2 percent in 1993,
but still barely half the typical 35 percent East Asian
savings rate.
Vietnam lacks an automated national clearing system and
the new regulations only allow for checks to be issued
for payment between branches of the same bank or at
branches of banks participating in a local clearing
system within any one province or city.
In addition, individuals will only be able to purchase
one book of 10 checks at any one time, and companies and
other entities will only be allowed three 10-check books.
"We have some companies that write out more checks than
that a day," the Western bank manager said.
The decree, signed by Prime Minister Vo Van Kiet last
May, was followed by a detailed circular guiding
implementation in December, but bankers said the details
are only now becoming clear.
They state the exact size for individual checks and said
they could only be printed at the State Bank's print
works, which has no capacity for security printing common
in other countries.
The first letter of the sum in words must be capitalized,
there must be no blank spaces, and there must be no
mistakes in filling out the check.
For companies the chief accountant must countersign every
check, but if there is no chief accountant the words
"there is no chief accountant" must be written in
Vietnamese in the space for the chief accountant's
signature.
Every check has to show three addresses. "You've got to
have the beneficiaries account number, where's somebody
going to get that from?" the bank manager said.
Foreign bankers in Hanoi met last week to discuss the new
check regulations, and most were dismayed and said the
decision should be deferred pending a rethink.
"[The banks] are going to speak to the State Bank and if
the regulations don't change they're going to discourage
their customers from using checks," a banking specialist
who attended the meeting said.
"Banks are not going to be able to guarantee that they
will be able to honor the check even if the funds are in
the account because there are so many different rules to
stick by and if any of those are broken, in theory, they
should dishonor the check. If they don't then they may
get fined."
No one at the State Bank of Vietnam was available for
comment on Wednesday.
Another decree issued by the government on February 24
outlined administrative penalties for banking violations.
Under the decree, breaches of the new check regulations
could lead to a maximum fine of 40 million to 50 million
dong (US$3,600 to US$4,500).
David Hutchinson, chief executive for HongkongBank in Ho
Chi Minh City, said that any attempt to decrease
Vietnam's cash-dependency was a good thing.
"Let's get checks out there in the system being used as a
means of payment, lets get cash off the streets. It's got
to be done and it's got to be done quickly. This is a
cautious start and I think it's a move in the right
direction," he said.
But he added that maybe Vietnam should have leap-frogged
checks, which are gradually being phased out around the
world. "Why use what is basically an outdated technology
when there are all sorts of other payment means coming
into use particularly with 'smart' cards," he said.
"Vietnam has the ability to make a huge leap and go for
the latest technology and adapt that, whether it be a
French Minitel-type system with every office having a
terminal or through smart cards."
Many observers however, were skeptical of Vietnam's
ability or willingness to progress on new technology such
as smart cards, given their track record with basic
banking techniques.
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