Deposit insurance policy – Local opinions


Deposit insurance policy has been officially implemented in Vietnam for nearly two decades. In particular, the promulgation of the Law on Deposit Insurance in 2012 has strengthened the legal basis and increased the efficiency of depositor protection, whichhas contributed to maintaining the stability of the credit institution system, ensuring the safe and healthy development of banking operations. The reporter reviews and summarizes feedback from the public all over the country on this policy.

Mr. Nguyen Van Hieu –Director of Ha Nam Branch of the State Bank of Vietnam:

The number of People's credit funds (PCFs) in the province is not high with only 11 funds, which account for about 3% of the market share, but has made positive contribution. This is reflected in the quality of operation, the deposit growth equal to the average level of the local banking system, and almostzero overdue debt.

The participation in deposit insurance is not only the responsibility of but also the benefit to PCFs. The deposit insurance policy has enabled depositors as well as members of PCFs to have more confidence in the PCF system, thus generating its  stable operation and growth.

Mr. Dang Ngoc Hieu – Deputy Director of Ha Nam Branch of the State Bank of Vietnam:

Deposit insurance policy has actively supported the operation of credit institutions, especially PCFs, andcreated public confidence, thus contributing to the development of the PCFs in particular and local economic development in general.

Mr. Pham Truong Giang – Director of Phu Tho Branch of the State Bank of Vietnam:

Deposit insurance policy has createdfavorable conditions for the development of insured institutions, especially the PCF system, increased the confidence of depositors, and made them feel secure in depositing money at local credit institutions.

Mr. Truong Quoc Thu – Deputy Director of Lam Dong Branch of the State Bank of Vietnam:

Thanks to the significant contribution of deposit insurance policy, local PCFs operatesafely and effectively in general, making use of theirown advantages in capital mobilization, lending and debt collection. As a result, PCFs’ reputation is increasingly enhanced. The amount of mobilized deposits in Lam Dong is rising continuously. At present, the capital mobilization and reserve stands atapproximately 4,400 VND billion (190 billion VND perFundon average). The steady capital growthmeans that PCFs can expand and maintain their sustainable operation. This is a positive factor to create motivation in business. It also supports the PCFs’ members in accordance with the purpose of mobilizing temporary idle capital to serve themselves, promote their production, business, services and lives.

Mr. Dinh Quang Hieu –Director of the Lam Dong Branch of the State Bank of Vietnam

In recent years, the growth rate of PCFs in terms of sizein Quang Binh isabout 25% per year on average. In the past 5 years, the totaldepositshave increased from over VND 1,000 billion to VND 2,200 billion, and the deposit mobilization has grown faster than the credit growth rate. It is evident that people are more confident in depositing money at the PCFs, and the position of the PCFs has been more and more improved. At present, the PCF system in Quang Binh is safe, healthy and  promotes economic efficiency, which is partly derived from deposit insurance policy

Ms. Tran Thi Kieu Thu – Deputy Director of Nam Dinh Branch of the State Bank of Vietnam

We highly appreciate that DIV always actively accompanies the PCFs in Nam Dinh with high responsibility. Based on their particular characteristics, PCFs operate independently and separately, which makes it difficult to deal with objective risks. Therefore, it is expectedthat DIV will beassignedthe functions of special lending, liquidity support, which helps stabilize the operation of PCFs in case of emergencies.

Ms. Bui Thi Kim Tinh – Chairperson of Lien Phuong PCF (Ward 8, Da Lat, Lam Dong)

Organizing various public awareness activities of deposit insurance policy at PCFs has helped local people feel assuredwhen depositing money, thereby contributing to mobilizing local resourcesto meet local demand for loans and enhance economic effeciency. We hope that DIV will implement more public awareness  programs to help depositors better understand deposit insurance policy, gain more confidence in the banking system in general and the PCF system in particular.

Ms. Bui Thi Thanh – Chairperson of Tan Phong Women's Union (Kien Thuy, Hai Phong)

Deposit insurance policy aims at social security and showsthe interest of the Government in depositors. Through DIV's public awareness activities, depositors have better understanding on this important policy as well as DIV’s operation.

Mr. Do Van Ty - Chairman of Giao Thanh PCF (Giao Thuy, Nam Dinh)

DIV was established in 1999and Giao Thanh PCF was granted the Certificate of deposit insurance on August 1, 2000. The establishment of DIV has brought changes for the capital mobilization of the Giao Thanh PCF in particular and the PCF system in general. People are no longer afraid to deposit savings as they are protected by  DIV. Thanks to the source of savings, we have been able to lend members without borrowing from the cooperative bank’s regulatory capital and have had the resources to support our members with reasonable lending interest rates while still maintain good business results.

Mr. Pham Ngoc Doanh - Chairman of Tien Noi PCF (Duy Tien, Ha Nam)

Having been established for justnearly 1 year, the total current deposits of Tien Noi PCF has reached about VND20 billion, while outstanding loans reached nearly VND21 billion. Tien Noi PCF has effectively mobilized the idle capital, from which people who have demand for loans for business production, mainly in fields of breeding, farming, purchasing toolscan borrow. Tien Noi PCF’s growthis attributed to the guidance and support ofrelevant authorities, organizations at all levels, including DIV. Tien Noi PCF has attracted many members, raised a large amount of capital and expanded its operations.

Ms. Nguyen Thi Bich Nga - Director of Bo DePCF (Binh Luc, Ha Nam)

At the transaction counter, Bo De PCF displays the certificate of deposit insurance participation in a distinguished and recognizable place for customers to notice. In addition, uponaccepting deposits, Bo De PCF staff also explainsdeposit insurance policy to the customers or hands over deposit insurance leaflets so that they can have a better understanding.

Mr. Dang Dinh Nghia - Chairman of Hat Lot Town PCF (Son La)

Organizing public awareness activities of deposit insurance policy is a meaningful operation. Thanks to this, local people can get access to the State’s deposit insurance policy, have a better understanding of their legitimate rights and interests when depositing money withinsured institutions, and actively participate in disseminating information about deposit insurance policy to a great number of regional depositors.

Mr. Nguyen Ngoc Hoang - Chairman of  Ward 2 PCF (Bao Loc city, Lam Dong)

Deposit insurance policy has contributed to raising public confidence in PCFs, so that the PCFs have affirmed their positions and reputation in the credit institution system. Up to now, our PCF has mobilized approximatelyVND 660 billion, which reflectsthe trust of depositors in our Fund.

Ms. Le Thi Nga - Depositor (Hung Ha, Thai Binh)

When depositing money, what I care most is whether my deposit is guaranteed or not. After listening to the banking officer’s explanation, I see that my rights and interestsare protected by DIV, and in caseof any failures, I will receive the payment as stipulated by law, which I think is the key to make depositors feel secure.

Mr. Trieu Thanh Tien - Depositor (My Lam, Tuyen Quang)

We are depositing money withthe PCF because we feel safe with the operation of the Fund, especially the fact that DIV, on behalf of the Stateprotects us,gives us more trust.

Ms. Nguyen Thi Thu Ha - Depositor (Kim Long, Thua Thien Hue)

I know that the deposit insurance coverage limit if the bank goes bankrupt has been increased to VND75 million, which is higher and more proper than before. So depositors like me also have more confidence to deposit money withbanks instead of storing them at home or lending without control. I only have income from the retirement wage, which is not high but after accumulating I still choose to put them in savings as the safest method.

Communication Department and Administrative departments of DIV branches