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

08:24-13/03/2019

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.

Interviewer: Could you please give us a brief insight into the International Association of Deposit Insurance (IADI) – the forum where deposit insurance organizations in the world share experiences and promote international cooperation in deposit insurance?

Mr Vu Van Long: The International Association of Deposit Insurers (IADI) was established in May, 2002. With the vision of sharing knowledge of deposit insurance among countries all over the world, IADI provides a lot of training programs as well as develops research works and guidelines on deposit insurance together with the mission of contributing to improving effectiveness of the deposit insurance system through promoting guidelines and international cooperation. As a non-profit organization, IADI represents 84 deposit insurance organizations all over the world.

Asia-Pacific Regional Committee (APRC) is one of the regional committees of IADI. The objective of APRC is to reflect rights and general issues in the region through sharing and exchanging information among members. By the end of February 2018, 19 deposit insurance organizations in the Asia-Pacific accounted for 23% of the total members of IADI. APRC plays an important role in the community of the deposit insurers.

Interviewer: When did the DIV join IADI and how has its membership helped the DIV?

Mr Vu Van Long: The DIV became an official member of IADI in 2003, just 3 years from the date of its establishment. As an active member of IADI, the DIV has gained a lot of benefits over the years. On the one hand, extending cooperation with advanced Deposit Insurance institutions (DI) in the world helps the DIV to enrich the knowledge, experiences in implementing DI activities, to update the latest information on finance-banking. On the other hand, the DIV has affirmed its position at home and abroad; and at the same time has further improved DI policy in protecting legitimate rights and benefits of depositors, contributing to maintaining the stability of the national finance-banking.

Active participation in IADI has promoted the role of the DIV in keeping the national finance-banking system stable, safe and sound; and at the same time affirmed the position of the DIV in the regional and international arena. Through IADI, Vietnam as well as other member countries has opportunities to share information, exchange experiences in DI operation to achieve the public policy objective together – that is to well protect legitimate rights of depositors, enhance the confidence of the public and keep the financial system safe.

Interviewer: During 15 years of being a member of IADI, how has the DIV brought into play its roles in IADI, and at the same time what efforts has the DIV made to set up a DI model close to the international practices?

Mr Vu Van Long: The DIV is an active member of IADI in general and APRC in particular. As one of the regional committees of IADI, APRC was established to improve the development of DI and benefits of member institutions through promoting international cooperation in DI, providing guidance on DI activities to newly-established and existing institutions in the Asian-Pacific region.

Annually APRC organizes an annual meeting and international conference to create a forum for member institutions to share knowledge, experiences in DI and to promote cooperation among member institutions in the region. For the first time, the DIV honorably hosted the 5th APRC in 2007 and in April 2018, the DIV again affirmed its position in the region by hosting the 16th Annual Meeting and International Conference.

The DIV has been always making efforts to improve the organizational organization as recommended by IADI in the Core Principles for Effective Deposit Insurance Systems (the Core Principles). Specifically, in 2013, after nearly 15 years of operation as regulated by the Governmental Decree in DI, the DIV had the legal basis at the highest level, namely the law on DI. Accordingly, the DIV is a non-profit State financial institution operating in the form of a single-member limited liability company with 100% State-owned chartered capital. Functions, tasks of the DIV were set up on the basis of the Core Principles of IADI, and at the same time met requirements of protecting rights of depositors and keeping the local finance-banking system safe and sound as recommended by the international practices.

Besides, the Law amending and supplementing some articles of the Credit Institution Law 2017 empowered the DIV to participate in the special control, including special lending, buying long-term bonds of assisting credit institutions, evaluating the feasibility plans on rehabilitating credit institutions under special control, setting up the bankruptcy plans of credit institutions under special control to submit to the State Bank of Vietnam for review, etc. Similar to other DI institutions in the world, the DIV has continuously confirmed its position as an efficient instrument of the Government, the State Bank of Vietnam in protecting depositors, raising the confidence of the public and making effective contribution to restructuring credit institutions.

With willingness, desire to improve capabilities and share experiences, the DIV wishes to bring into play its internal strength and take advantage of opportunities to enhance its roles, position in protecting the safety and soundness of the banking system, to become an effective, modern, deeply and widely integrated DI institution and to approach close to the international practices and standards.

Thank you very much!