Some "highlights" of deposit insurance operations in first 6 months

09:44-13/09/2019

According to the Deposit Insurance of Vietnam (DIV), by the end of June 2019, there were 1,282 insured institutions in Vietnam (95 banks and foreign bank branches, 01 cooperative bank, 1,182 People’s Credit Funds (PCFs) and 4 microfinance institutions).

Remarkably, in the first 6 months, the DIV did not have to make deposit insurance payouts. This is considered one of the "highlights" of deposit insurance operations in the first 6 months of 2019.

Promptly granting and revoking certificates of deposit insurance participation

Granting and revoking certificate of deposit insurance participation was done promptly and according to regulations, meeting the needs of credit institutions (CIs), contributing to strengthening the DIV's role and position and strengthening public confident in the banking system. In the first 6 months, the DIV granted 01 certificates of deposit insurance participation, re-granted 01 certificate and nearly 260 copies of certificates to credit institutions; revoked 01 certificate.

Deposit insurance premium collection reaching over 100% of 6-month plan

Total amount of premiums collected by the DIV in the first 6 months was more than VND 3,500 billion, an increase of roughly 9% against the same period in 2018, reaching over 100% of the first 6-month plan and 50% of the 2019 plan. According to the DIV's assessment, insured institutions strictly implemented the assessment and payment of premiums according to the regulations.

In order to ensure compliance with legal regulations on the collection of deposit insurance premiums, the DIV actively and promptly urged, guided, answered CIs and resolved arising problems related to the assessment and collection of deposit insurance premiums; regularly monitored and analyzed variations in insured deposits at CIs.

Safe and effective fund management

Fund management and investment complied with the regulations, being safe and effective, bringing additional revenues to the Operational Reserve Fund and enhancing the financial capacity of the DIV. As of June 20, 2019, the total of temporarily idle capital invested was more than VND 52,000 billion, an increase of more than 21% over the same period of 2018. Most of the DIV's temporary idle capital was invested in Government bonds in accordance with the current regulations. As of June 20, revenues from investment activities of 2019 increased by roughly 14% against the same period in 2018.

Strengthening supervision of insured institutions

Besides continuing to strengthen the supervision of insured institutions, the DIV effectively exchanged information with the State Bank of Vietnam (SBV) in off-side supervision, actively controled the quality of reported information and improved the data reporting forms to enhance effectiveness of the implementation of the Regulation on reporting insured deposits.

In the first 6 months of 2019, the DIV completed on-site examination of 210 insured institutions including 16 commercial banks, 193 PCFs, 01 microfinance institution, reaching 46% of the 2019 plan.

Promoting policy communication to depositors

The DIV regularly informed the public about international and domestic deposit insurance activities, monetary policy and other banking issues necessary for depositors. On the other hand, the DIV disseminated  deposit insurance policy via the Vietnam Post Corporation’s 1,500 commune cultural post offices, creating effective communication channels and saving costs. The DIV coordinated with the SBV’s branches in provinces, cities, insured institutions and local  organizations to communicate deposit insurance policy directly to depositors in many provinces and cities across the country such as Vinh Phuc, Phu Tho, Nghe An and Ha Tinh, Son La, Ben Tre, Bac Lieu ..., attracting the attention of local people.

Actively implementing supporting activities

For now, the DIV has completed a draft report on 5-year implementation of the Law on Deposit Insurance, made related proposals so that the DIV can participate more in  the restructuring of credit institution as well as implement the Prime Minister's Directive on strengthening solutions to ensure operational safety, consolidate the PCF system and the Scheme on strengthening and developing the PCF system until 2020 and orientations to 2030 issued together with the SBV’s decision.

The DIV also strengthened international cooperation, contributing to supporting experience sharing and improving the effectiveness of the DI system in Vietnam. In the first 6 months, the DIV cooperated with the Indonesia Deposit Insurance Corporation (IDIC) to hold the Seminar entitled “Deposit Insurance Reform - Experience of IDIC” in Ho Chi Minh City, Hanoi and Da Nang; organized a meeting with the Korean Industrial Bank’s mid-level managers visiting and learning about the activities of the DIV; participated in the 58th Executive Committee Meeting and the 5th Research Conference of IADI, the 2019 Annual Meeting of APRC, signed a Memorandum of Understanding with the Deposit Insurance Agency of the Russian Federation and signed a renewed Memorandum of Understanding with the Korea Deposit Insurance Corporation.

The DIV supported insured institutions in using software for transferring electronics reports to the DIV, developed reporting forms for receiving information on deposits, regularly reviewed and promptly resolved incidents arising in the process of sending and receiving reported information.

Key tasks in the last 6 months

The DIV asserted that it will: continue to study and propose amendments to the Law on Deposit Insurance to effectively participate in the process of restructuring credit institutions; well implement new functions and tasks in accordance with the Law on amendment and supplement to some articles of the Law on Credit Institutions, the Prime Minister’s Directive on enhancing measures for ensuring operational safety and strengthening the PCF system and the  Scheme on “Enhancing and developing the system of PCFs to 2020 with orientations to 2030” issued together with the SBV’s Decision;

Participate in restructuring credit institutions under the directions of the SBV;

Work closely with the SBV to submit the DI development strategy until 2025 and orientations to 2030 to the Prime for approval;

Focus on studying, building and issuing administrative  documents in accordance with the approved plan;

Improve the quality of insured deposit examination, risk supervision and warning; effectively implement the Regulation on reporting  insured deposits;

Improve financial capacity through assessing and collecting deposit insurance premiums in accordance with the regulations; effectively invest temporarily idle capital on the principle of ensuring the safety and development of its capital;

Focus on DI policy communication to strengthen public confidence, and provide information about the conduct of monetary policy and banking activities necessary for depositors;

Continue to restructure its organization, consolidate the group of high-ranking officers; develop human resources in line with the development trends of the banking system in Vietnam, developing staff with a high level of expertise, professional ethics and professionalism, meeting working requirements and fulfilling assigned tasks;

Promote the effective operation and use of the information technology system and software applications of the FSMIMS Project; comprehensively deploy a information security system;

Actively study and make policy proposals; actively exchange and cooperate with international deposit insurers and other international organizations.

Research and International Cooperation Department