Promoting the role of protecting depositors’ interests


Pursuing the ultimate goal of contributing to maintaining the stability of the credit institutions system, protecting legitimate rights and interests of depositors, the Deposit Insurance of Vietnam (DIV) actively conducted professional activities in the right direction and obtained remarkable achievements in almost all operations, from strengthening the legal framework, effectively implementing deposit insurance (DI) policy to improving supporting activities.

Strengthening the legal framework

For the first six months of 2018, the DIV focused on doing research, making proposals to implement the Law on Amendments and Supplements to a number of articles of the Law on Credit Institutions; handling the bottleneck in the participation in special control as well as other restructuring plans of the State Bank of Vietnam (SBV). The DIV also actively cooperated with relevant ministries and agencies to work on the amendments of legal documents regarding the DIV operations such as: Circulars on the special control of credit institutions, financial scheme and guidance on the accounting scheme applicable to the DIV; participated in drafting the Decree to replace the Decree on keeping confidentiality , archiving and providing information related to the customers’ deposits and properties.

At the same time, the DIV paid proper attention to developing and issuing internal governance documents in response to the emerging requirements of DIV’s new role in the restructuring process of credit institutions.

Effectively implementing DI policy

In the first half of 2018, the DIV successfully implemented DI policy. As of June, 2018, 1,282 deposit taking institutions were insured including 94 banks and branches of foreign banks, 1 cooperative bank, 1,183 people’s credit funds and 04 microfinance institutions. The DIV newly granted 08 certificates and re-granted 08 certificates and 96 copies of certificates of deposit insurance participation, revoked 01 certificate, updated information changes of 129 certificates of deposit insurance participation. Granting and revoking certificates of deposit insurance participation was implemented in a timely manner in accordance with the regulations, contributing to the effective management of insured institutions, and to the enhancement of the DIV’s reputation and the depositors’ confidence in the banking system.

The DIV collected deposit insurance premiums from insured institutions for quarter 1 and 2 with the total amount of about VND 3,000 billion, an increase of 16 percent against the same period last year. DIV pro-actively supervised, provided specific guidance, promptly responded to questions, and timely handled violations of deposit insurance premium assessment and collection. As a result, insured institutions seriously complied with premium assessment and collection as prescribed.

Notably, the DIV was not required to make any insurance payment duty for the first six month; however, the DIV has developed the scenario and prepared resources for payout. It proved that DIV was well prepared and ready to protect the rights of depositors.

Fund management and investment was compliant with law and regulations, safe and effective, contributing to fund development, enhancing the financial capacity of the DIV. As of June, 2018, the total of temporarily idle capital invested was VND 42,500 billion, (an increase of 23 percent over the same period of 2017). Most of temporarily idle capital was invested in G-bonds.

The DIV regularly monitored the operation of insured institutions by following functions: on-site examining 121 insured institutions, including 06 commercial banks, 115 people's credit funds accounting for 34% of the examination plan of 2016; making the field trips to study the operation of 02 micro-finance institutions; off-site monitoring 100% of insured institutions.

Moreover, to enhance the effectiveness of supervision, the DIV provided guidance to implement the Regulation on information sharing and reporting to 100% of insured institutions; gave training and shared experience in implementing this Regulation with 90% of institutions.

Public relations activities largely contributed to the implementation of DI policy. Apart from traditionally formal channels, the DIV also paid attention to making full use of new communication tools in order to disseminate the policy to various groups of people.

Optimizing supporting activities

The highlighted achievement in the DIV’s international cooperation in early 2018 was the successful organization of the APRC Annual Meeting and International Conference titled “Small and medium sized insured institutions, what we can do for them” with significant support from the SBV. The APRC 2018 was attended by 180 delegates, including 70 foreign delegates from 21 countries and territories, 54 delegates from domestic organizations and ministries, credit institutions, communication agencies, v.v. The preparation and organization by the DIV was highly evaluated by all participants.

Other supporting activities such as training, applied research, international cooperation, IT application in deposit insurance operations attracted appropriate attention and contributed significantly to the operations of the DIV.

With the aim of fully and effectively implementing its functions, striving towards the international standards, protecting the legitimate rights of depositors, contributing to the stability of the banking system, out of more than 16 task groups for this year’s second half, the DIV decided to focus on the specific tasks as follows: Improving the examination on insured deposits, risk supervision and dealing with troubled credit institutions;  developing the contingency plan for payout, diversifying methods of payout to shorten the duration of payout and guarantee the accuracy and timeliness; enhancing the financial capacity by assessing and collecting the premiums as regulated, effectively investing the temporarily idle funds on the basis of safety and growth; purchasing the long-term bonds of supporting credit institutions following the specific guidance of the SBV, Minister of Finance as regulated in the Law on Amendments and Supplements to a number of articles of the Law on Credit Institutions.

Briefly, the achievements made in the first half of 2018 served as an important incentive for the whole DIV’s system to successfully reach the ending goals in 2018 which are building up a strong DI insurer, fulfilling its mandate of protecting depositors and contributing to maintaining the stability of the credit institutions system, ensuring the safe and sound development of the banking system.

Dr. Nguyễn Thị Kim Thanh According to: ""