In an effort to reduce the relatively high volume of cash transactions in the economy and better utilize the developing banking system, on 31st of December 2013, the Vietnamese Government issued Decree 222/2013/ND-CP on Cash Payments which came into effect from 1st of March 2014 (Decree 222).

Decree 222 aims at restricting certain payments in cash within the territory of Vietnam. In particular, organizations and individuals are not permitted to make cash payments for transactions involving securities, enterprise capital contribution, share capital transfer and non-banking lending.

Under Decree 222, credit institutions and foreign bank branches are permitted to agree with their customers on cash withdrawal schedule and obligating advance notice for cash withdrawal of substantial amounts. The Decree also requires both credit institutions and foreign bank branches to introduce and publicly display the list of fees for cash services at their customer points.

Despite being a positive step towards a less “cash economy”, the Decree may have limited effect since it does not govern many other high value transactions such as sale and purchase of property and luxury goods which are still commonly paid in cash in Vietnam.