Controlling the amount of cash in circulation plays an important role in helping the central bank effectively implement monetary policy and promote the development of the economy.
Cash payment is understood as the direct payment or performance of other payment obligations by organizations or individuals in payment transactions. According to the provisions of Decree No. 222/2013/ND-CP issued by the Government in 2013 and effective from March 1, 2014, “cash” means banknotes and metal coins issued by the State Bank – Vietnam Dong.
Decree 222/2013/ND-CP also stipulates a number of transactions that cannot be paid in cash in the territory of Vietnam. However, in business, and commerce, the law does not prohibit all, but only focuses on transactions that are easily exploited by criminals as “money laundering”. The two main types of transactions that are prohibited from paying in cash are:
1. Stock trading
- Applicable to transactions on the Stock Exchange, carried out in the centralized market. For transactions on the decentralized market through electronic transactions, the payment method will be agreed upon by the buyer and seller. However, these transactions are now usually paid by wire transfer.
- Securities transactions that have been registered and deposited at the Stock Exchanges do not go through the trading system of the Securities Depository Centers.
2. Financial transactions of enterprises
- Including transactions of capital contribution, purchase and sale, and transfer of capital contributed to the enterprises.
- Enterprises that are not credit institutions are not allowed to borrow and lend in cash.
Currently, there are many enterprises that are not credit institutions but carry out lending activities for “idle” amounts of enterprises, which is not in accordance with the provisions of law, because the law also clearly stipulates that cash services are activities of the State Bank, credit institutions. Therefore, the enterprises that are not credit institutions should take note of this issue.