Opening ordinary account of organization in Vietnam requires signature of chief account

 On 19 August 2014, State Bank of Vietnam (SBV) has issued Circular 23/2014/TT-NHNN providing guidelines on open and use of ordinary account, which will go in force from 15th October 2014 and replace Decision 1284/2002/QD-NHNN, in which opening ordinary account of organization in Vietnam requires signature of chief account.

 If organizations is subject to be required signature of chief accountant (or accountant) on the vouchers in transaction with the bank in accordance with provisions of applicable laws, the file for the opening of ordinary accounts shall include appointment letter of chief accountant and ID card (or passport) and the application for the open of ordinary account shall include the information chief accountant, signature specimen of chief accountant. This provision is in conformity with Point 2.c Article 8 of Decision No.1789/2005/QD-NHNN dated 12 December 2005 of State Bank of Vietnam on the issuance of the regime on banking accounting vouchers says “For vouchers in transaction with the bank drawn by the customers who are units, organizations that are required to have a chief accountant in accordance with provisions of applicable laws, the voucher must bear full signatures of account holder, chief accountant or the person who is authorized to sign and the seal of the unit (in case of a paper voucher)”.

 Pursuant to Article 2, Article 37 of Decree No.129/2004/ND-CP dated 31 May 2004 of Vietnamese Government providing a guidance on some articles of Law on accounting, it prescribes that all accounting units which must appoint chief account (or account) includes companies, foreign company branches, representative offices of foreign companies, cooperatives and business households.

 There is another point of view argues that this provision is just applied for state own enterprises because transactions without signature of chief accountant, such transactions shall be void. This argument is supported by almost of enterprises and banks.

 However, State Bank of Vietnam explains that this provision is applied not only for state own enterprises, but also for organizations other than state own enterprises are required to have a chief accountant in accordance with provisions of applicable laws.      

 There are many difficulties faced banks and customers to carry out this provision. It is still controversial matter.

 Beside the above matter, Circular 23/2014/TT-NHNN has new key regulatory changes as follows:

1. Authorization for the use of ordinary accounts in Vietnam: The authorization of account holder, chief accountant to other person for use of account shall be made in written paper accompanying with signature specimen, ID or passport card of the agent, and be approved by the bank. As previous Decision 1284, authorization is not required the approval of the bank.

2. Subjects which are entitled to open ordinary accounts in Vietnam: Individuals who have full 15 years of ages to 18 years of ages, have not lost civil act capability or have not limited civil act capability and have their own property, are allowed to open their account. As previous Decision 1284, these subjects were not mentioned.

3. File for the opening of ordinary accounts of organizations in Vietnam: if organizations is subject to be required signature of chief accountant (or accountant) on the vouchers in transaction with the bank in accordance with provisions of applicable laws, the file for the opening of ordinary accounts shall include appointment letter of chief accountant and ID card (or passport). As previous Decision 1284, these documents were not mentioned.

4. Application for the opening of ordinary account in Vietnam:

4.1. Account holder is individual: Application for the open of ordinary account shall include the following factors: Information of account holder (or the administrator) and signature specimen.  Information of account holder (or the administrator) has new following changes:
- Information of account holder being Vietnamese citizens: full name, day, month and year of birth, nationality, occupation, position, telephone number, valid ID number (or passport) and its date and place of issuance, permanent address and current address, resident or non-resident. Compared with previous Decision 1284, this Circular requires additional information: day, month and year of birth, nationality, occupation, position, date and place of issuance of ID card, permanent and current address.
- Information of account holder being foreign citizens: full name, day, month and year of birth, nationality, occupation, position, telephone number, valid ID number (or passport) and its date and place of issuance and entry visa, oversea residing address and residing address in Vietnam, resident or non-resident. Compared with previous Decision 1284, this Circular requires additional information: day, month and year of birth, nationality, occupation, position, date and place of issuance of passport, residing address in Vietnam and oversea.

4.2. Account holder is organizations: Application for the open of ordinary account shall include the following factors: Information of organization, authorized person, chief accountant, signature specimen of account holder and chief accountant, signature of authorized person and seal (if any). Compared with previous Decision 1284, this Circular requires additional information about chief accountant (in case required by laws).

5. Order and procedure for the opening of ordinary account in Vietnam:

5.1. If customers need opening ordinary account, they shall send a file for opening of account to the bank by post or lodging directly or electronic facility.

5.2. The Bank shall check and process the file for opening of account within a (01) day from receipt date.

5.3.  If file for opening of account is fully consistent with provisions of laws, the bank shall enter the agreement directly face to face after checking the signature and seal specimen ensuring its correctness.   

6. Closure of ordinary account in Vietnam: Ordinary account may be closed if it is not maintained its minimum balance and does not operate for a long time. The period of notice is set by the bank and the notice is given to customer. As previous Decision 1284, this provision was not mentioned.  

7. This Circular also provides other provisions on use of ordinary account, rights and responsibilities of the bank and customer, blockade of account and settlement of dispute.

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