VietNamNet Bridge – Cash remains the main payment instrument in the national economy. The State Bank of Vietnam does not have the right to force people to make payment in check and eliminate the payment in cash. This would violate the constitution, experts say.

The State Bank of Vietnam, in an effort to drive the national economy to a non-cash economy, has drafted a decree which stipulates that people will have to make payments via bank accounts for the transactions of valuable assets, such as houses or cars.

Vu Quang Viet, a well-known economist affirmed that people have the right to decide their payment method. They can either make payment in cash, gold, or cheques.

In developed economies like the US, businesses can demand buyers to make payment in credit cards or cheques, and buyers have the right to refuse the requirement, and they can buy products from other distributors.

The State can ask state agencies to make payment in cheque, because the requirement is within the state’s competence. It can also force businesses to make payment in cheque when the payment volume exceeds a certain threshold, because businesses are set up under the Enterprise Law, and the state can set up the laws to control the spending of enterprises to prevent the tax evasion.

Bui Kien Thanh, also a well-known economist, has pointed out a lot of problems to be arisen, if the decree is brought into life.

The draft decree says people would have to make payment via banks, even if they buy a motorbike valued at about 10 million dong. How can the people in remote areas make payment, if there is no bank near their houses? How can people make payment on non-working days like Saturdays and Sundays?

Thanh said in developed economies, people have got used to making payment with credit cards, while only one percent of transactions are made in cash. However, the banking systems in the economies have been developing for the last 200 years already. However, it would be unfeasible for Vietnam, the economy with the young banks, to do the same thing.

There are at least two problems that discourage people to make payment via banks. First, they would have to pay bank service fee. Second, they would have to leave money at banks, which allows banks to exploit the huge capital at low costs.

Nguyen Duc Thanh, Director of the Economics and Policy Research Center, though affirming that Vietnam should strive to a non-cash economy to ensure the transparency in commercial transactions, still said that it is now not the right time for Vietnam to impose a non-cash payment mechanism on people.

The State Bank attempts to force people make payment via banks when people do not have confidence on the banking system. The surprisingly high bad debt ratios and the arrest of a lot of big bankers have raised doubts about the capability of Vietnamese banks.

Meanwhile, the State Bank of Vietnam cannot prove the necessity of the regulation it attempts to impose. It cannot persuade people that people should make payment via banks for the benefits of the whole economy, not for the banks’ benefits.

Thanh affirmed that people would make payment via banks themselves, if they can find the benefits in doing this. It’d be better to encourage people to use electronic money instead of forcing them to do that. In fact, in the transactions with the payment of VND 1 billion or more, people would make payment via banks, even though they are not told to do this.

Dat Viet