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Development Strategy of Vietnam Banking Sector to 2025 with orientations to 2030: Keeping deposits safe

One of the important tasks set in the Development Strategy of Vietnam Banking Sector to 2025 with orientations to 2030 is: to set up a mechanism to support credit institutions (CIs) which are assigned to assume, manage weak CIs and CIs participating in the restructuring process; to set up an early warning system, a mechanism for systemic crisis management and resolution of CIs which are potentially highly risky, ensuring the intervention power of the State Bank of Vietnam (the SBV) to protect the safety of the system and deposits of the public; to amend, supplement regulations on dealing with cross-ownership, preventing abuse of management, execution powers, large shareholders’ rights to control operation of CIs; to improve the legal framework for merger, integration, bankruptcy of CIs.

How are depositors protected by Deposit Insurance of Vietnam?

The Deposit Insurance of Vietnam (DIV) plays an important role in the restructuring of the credit institutions system (CIs), protecting the legitimate rights and interests of depositors, contributing to maintaining the stability of CIs, ensuring the safe and sound development of banking operations.

Implementation of the Internal Regulation on reporting of information about the insurable deposits: Contributing to improving operational effectiveness of People’s Credit Funds (PCFs) in the Mekong Delta River area.

The Internal Regulation on reporting of information about the insurable deposits (the Internal Regulation 2252) issued on December 15, 2017 together with the Decision No. 2252/QD-BHTG by the Board of Directors of the Deposit Insurance of Vietnam (the DIV), effective from July 01, 2018, has created a new legal framework for management, storage and reporting on information about deposits and depositors at insured institutions. The Internal Regulation 2252 provides uniform guidelines for insured institutions, meeting the requirement of carrying out the management function of the DIV, and therefore contributing to increasing the transparency in the banking operation.

 

Prime Minister instructs to enhance measures for ensuring operational safety and strengthening resilience of People’s Credit Funds system

 “Promote active communication of state policy on the operation of the People’s Credit Funds (PCFs) system, support people and members of PCFs to improve their knowledge, actively take part in the management and supervision of PCFs; strengthen the role of the Cooperative Bank of Vietnam, Deposit Insurance of Vietnam (DIV) in connecting members of the PCFs system, providing financial assistance and dealing with problems of PCFs, taking part in and supporting the examination and supervision of PCFs by the State Bank of Vietnam (SBV)” – This is part of the Prime Minister’s Directive No. 06/CT-TTg dated March 12, 2019 on enhancing measures for ensuring operational safety and strengthening resilience of PCFs system. 

“Promote active communication of state policy on the operation of the People’s Credit Funds (PCFs) system, support people and members of PCFs to improve their knowledge, actively take part in the management and supervision of PCFs; strengthen the role of the Cooperative Bank of Vietnam, Deposit Insurance of Vietnam (DIV) in connecting members of the PCFs system, providing financial assistance and dealing with problems of PCFs, taking part in and supporting the examination and supervision of PCFs by the State Bank of Vietnam (SBV)” – This is part of the Prime Minister’s Directive No. 06/CT-TTg dated March 12, 2019 on enhancing measures for ensuring operational safety and strengthening resilience of PCFs system.

Measures for realizing targets of dealing with bad debts in coming time

Despite remarkable achievements, there remains shortcomings and problems arising from the bad debts resolution process in accordance with the National Assembly’s Resolution No.42/2017/QH14 that need comprehensive measures and then cooperation among relevant ministries and sectors and local authorities in order to fulfill all the set targets. 

 

SBV’s regulations on term deposits

On December 31, 2018, the State Bank of Vietnam (SBV) issued the Circular No.49/2018/TT-NHNN on term deposits. Accordingly, this Circular prescribes term deposits between organizations or individuals and credit institutions, branches of foreign banks (hereinafter referred to as credit institutions). It excludes term deposits between credit institutions.

The deposit insurance policy attracts attention of students

Students are important targets of financial and deposit insurance education programs. Accordingly, the Deposit Insurance of Vietnam (the DIV) has carried out activities to disseminate the DI policy to students and initially received active responses.

 

Interview with Mr Vu Van Long –Deputy Director of the Deposit Insurance of Vietnam: Efforts to bring deposit insurance activities in Vietnam close to international practices

After nearly 20 years of operation, the Deposit Insurance of Vietnam (DIV) has affirmed its increasing roles in protecting legitimate rights of depositors, contributing to keeping the credit institution system stable for prudential and sound development of banking activities in Vietnam. Besides, the DIV has been making its great efforts to bring deposit insurance activities close to the international practices. To have better understanding of these achievements, the interviewer had an interview with Mr Vu Van Long –Deputy Director of the Deposit Insurance of Vietnam.

Interview with Assoc. Prof. Dr. Nguyen Thi Mui –Member of the National Financial and Monetary Policy Advisory Council: People need to have thorough understanding of deposit insurance

Depositing idle money with banks is a habit of many people. These deposits not only bring profits through interest, but also are ensured through deposit insurance policy (DI). If credit institutions fail, depositors will be paid out for their insured deposits. How are rights of depositors ensured? How is the role of DI institution indicated? In this regard, the interviewer had an interview with Assoc. Prof. Dr.   Nguyen Thi Mui - Member of the National Financial and Monetary Policy Advisory Council.

Deposit insurance facilitates rural economic development in Dong Thap

Dong Thap is one of 13 Mekong Delta provinces in which agriculture is the biggest component in the economic structure. Economic development in rural areas therefore becomes a key responsibility. As of August 31, 2018, total outstanding loan was 54 trillion dongs, increased by 7% compared with early 2018; capital mobilization stayed at more than 40 trillion dongs, with growth of 10% compared with early 2018. The average outstanding loans for rural and agricultural development over the years accounted for 70% of the total loans.

 

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