Restructuring banks – Ensuring legitimate rights and interests of depositors


“One of the most important objectives and principles in the implementation of restructuring the system of credit institutions is to ensure the legitimate rights and interests of depositors. This is the thorough view-point of guidance by the Party, the National Assembly, the Government in the process of restructuring the system of credit institutions”. That was the affirmation of the Deputy Governor of the State Bank of Vietnam (the SBV), Mr Dao Minh Tu, at the meeting with the Vietnam Construction One-Member Limited Liability Commercial Bank (CB) in Long An province in the afternoon of December 18.

According to Deputy Governor Dao Minh Tu, under the close instruction ofthe Party, the Government, cooperation of ministries, sectors and authorities at different levels, efforts of the whole banking system, the restructuring of the credit institutions system has achieved the objectives, orientations and tasks set up in the Schemeon“Restructuring the credit institutions system in the period of 2011-2015” (phase 1). Among them, the most significant result is that the stability and safety of the system of credit institutions weremaintained andgradually improved, avoiding unexpected failures of credit institutions, ensuring the rights of depositors.

Based on approval and guidance of the Politburo Committee, the Government on the Scheme on “Restructuring the credit institutions system attached with settlement ofbad debts in the period of 2016-2020” (phase 2), the SBV has been urgently preparinga Plan on implementing this Schemewith detailed objectives, roadmaps and task assignments.

The Deputy Governor also stressed that in both 2 phases of the restructuring process as mentioned above, the thorough guiding view-point of the Party, the National Assembly and the Government is to ensure the stability, safety of the system, especially the legitimate rights and interests of depositors.

According to the Deputy Governor, in phase 2 of the restructuringprocess, completing the legal framework of restructuring the credit institutions system attached with the settlement ofbad debts will be a favourable condition, helping to speed up and the process and make it more effective.

Specifically, based on the achieved results, analysis of shortcomings, causes and experiences drawn from the implementation of the Scheme on Restructuring in the period of 2011-2015, under the guidance of the Politburo and the Government, the SBV set up and submitted to the Prime Minister for approvalthe Scheme on “Restructuring the credit institutions systemattached with settlement ofbad debts in the period of 2016-2020” in the Decision No. 1058/QD-TTg dated 19/7/2017 (Scheme1058). In addition to setting up Scheme1058, toovercome legal shortcomings in settlingbad debts and collaterals of credit institutions,  the SBV submitted to the Government, the National Assembly for consideration and approval the Resolution 42/2017/QH14 dated 21/6/2017 on pilot settlement ofbad debts of credit institutions (Resolution 42). The Resolution 42 has laid a favourable legal framework for settlingbad debts, collaterals of credit institutions, asset management institutions.

Besides, based on the receipt, appraisal, evaluation of the options of restructuring credit institutions attached with settlement of bad debts of credit institutions, the SBVissued guiding documents to each institution in a timely manner, requiring them to amend, supplement their options so that these credit institutions can fully overcometheir shortcomings in accordance with right objectives and requirements.

On the other hand, to support the process of restructuring and settlingbad debts, on November 20th 2017, the National Assembly officially approved the draft Law on amending, supplementing a number of articles of the Law on Credit Institutions effective from 15thJanuary2018. This important lawhas laid a legal framework for implementation of solutions in the Scheme on restructuring the credit institutions system attached with settlement ofbad debts in the period of 2016-2020 approved by the Prime Minister. The amended, supplemented contentsof this Law mainly focus on such issues as enhancing management capacity of credit institutions, early intervention measures applied to problem credit institutions and the mechanism for dealing with credit institutions under special control with a view to ensure the safety of the banking system, confidence and rights of depositors.

Also at the meeting of the working group in CB, Mr Nguyen Van Tuan, the Chairman of the Board of Members of CB told that after 3 years of shifting fromthe state ownership, CB has maintained and reinforced banking operations in a stable way with a lot of positive results like keeping the whole CB stable, enhancing confidence of clients. Besides, the size of business operations has strongly grown compared to the period before 5th March 2015; raised capital balanceincreased by over 5000 billion dongs; by 30thNovember 2017, CB recovered over 5000 billion dongs of bad debts…

Atsome Transaction Offices of CB in Long An province, many people deposittheir money with numeroustransactions, proving that the confidence of clients in CB has always beenkept. Mr Tran Van Re (living in Tan An, Long An), a retiree who came to do transaction at CB, shared “I still deposita large amount of money atCB because I believe that as a 100% State-owned bank, backed by Vietcombank, CB will ensure the legal rights of depositors”. And Mr Ho Van Tung (district 10 – Ho chi minh city), despitelong distance, still chose CB as a safe place for his moneybecause “this bank has a wide network of transaction and enthusiastic, dedicated and professional services”.

Supervision Department – DIV’s North West regional branch